Car dealerships settle unfair practices case

Deepa Bharath

LOS ANGELES -- Two Toyota dealerships, including one in Costa Mesa,

have agreed to reimburse more than $1.9 million to customers who alleged

the dealers engaged in misleading advertising and unfair sales practices,

officials said.

The agreement was the result of a joint consumer protection action

against the South Coast Toyota dealership in Costa Mesa, as well as South

Bay Toyota in Gardena. Both dealerships were sold Feb. 6.

The settlement calls for the former owners of the dealerships to pay

$1.5 million in restitution, $405,000 in penalties and $95,000 in costs.

The defendants settled but have not admitted to the alleged violations.

The case was investigated by the Orange County district attorney’s

Consumer Protection Unit, the Los Angeles district attorney’s office, the

state attorney general, the Department of Motor Vehicles and the Los

Angeles County Department of Consumer Affairs.

The dealerships’ questionable sales practices “generated several

complaints locally,” said Sandra Michioku, spokeswoman for Atty. Gen.

Bill Lockyer.

“Several hundred people called or complained,” she said. “The calls

are still trickling in.”

The dealerships for their part have also repaid or reimbursed some

customers on their own, Michioku said.

According to officials, the dealerships were accused of numerous

violations that included advertising vehicles for sale or lease that were

in fact not available and failing to give the required 48-hour advance

written notice to withdraw advertisements of vehicles that have been sold

or withdrawn from sale.

Several customers also complained to officials that the dealerships

engaged in a “bait-and-switch” scheme in which the dealer aggressively

attempts to switch consumers who respond to the advertisements to

different, more expensive vehicles, which the dealer would sell at prices

substantially above those advertised.

The settlement agreement, filed Wednesday in Los Angeles Superior

Court, remains to be approved by a judge.