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Attorney general sues southern Illinois dealer over 'deceptive' ad

November 22, 2010
Illinois Attorney General Lisa Madigan charged a downstate dealer with five infractions of the state's Consumer Fraud and Deceptive Business Practices Act and other vehicle advertising regulations, for an ad that appeared over the summer. The suit seeks $250,000 in penalties. The consumer fraud suit follows a 2003 complaint by Madigan's office, after which the dealer pledged to make no more ad infractions. Madigan said that a June 23, 2004, ad broke the law and last year's pledge. The ad by Holzhauer Auto & Truck Sales of Nashville, Ill., about 50 miles southeast of St. Louis, allegedly touted the following: "Up to $6,500 in Rebates or Dealer Cash" Dealers are prohibited from offering dealer-funded rebates, offsets or other payments to consumers. Under Illinois law, rebates only can be offered when they are provided by a third party (manufacturer or approved dealer line) and that party is disclosed along with all terms affecting the rebate. The rebate statement also violated requirements that the full range of possible discounts is disclosed. "Save up to $18,000 from original MSRP" The claim allegedly violates rules that prohibit the use of the MSRP-or the cost of a new car-as a basis for price comparisons of similar used vehicles. The statement also fails to disclose the highest price or the lowest discount in the cost range. "Free Gas 'til 2005" The reference allegedly violates a ban on free gifts from dealers and fails to identify the actual donor, details and restrictions of the incentive program. The ad, Madigan said, does not clearly disclose whether the free gas is provided by the dealer or some other entity. The attorney general's suit also alleges Holzhauer's ad contained multiple asterisks that could confuse and overwhelm readers. For example, an asterisk followed ad copy in large bold type that stated $59 PER MONTH." However, there was no corresponding reference to the asterisk elsewhere in the ad. Madigan's suit seeks $50,000 for each violation committed with intent to defraud; a $50,000 civil penalty; and court costs. The suit also seeks to prohibit Holzhauer from further violating the Consumer Fraud Act or the administrative rules on motor vehicle advertising.