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Dealer ordered to close for Memorial Day weekend over false ads

November 23, 2010
A California dealership was ordered to close over the Memorial Day weekend as penalty for false and misleading advertising claims made from June 2000 to November 2001. Lithia Nissan of Fresno, Calif., also agreed to pay $160,000 to avoid a longer suspension and to reimburse the state's department of motor vehicles $25,000 for its investigation and legal costs. Allegations against Lithia Nissan included false advertising of guaranteed loans and pre-approved credit cards. One ad offered $200 in free groceries for test-driving any vehicle, when actually "the consumer had to pay and mail in an order to receive discount coupons," according to the DMV. Other allegations included failing to sell vehicles at advertised prices and false claims that consumers "could drive away in a new car for only a $45 documentation fee." Consumers also were invited to bring their own cars to sell and were told "used-car buyers will be on-site bidding for your vehicle, ensuring top dollar." Instead, only appraisers were present and no bidding occurred, DMV officials said. Some of the claims appeared in The Sacramento Bee and in direct mail to more than 75,000 customers-including DMV investigators. Steven Gourley, director of the California DMV, said the May 24-26 store closure would send a strong message "to all other California dealerships that these kinds of illegal business practices will not be tolerated." The DMV also will conduct four unannounced audits of the dealership during a four-year probationary period, and Lithia will reimburse the department up to $7,500 per audit.