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November 18, 2005
Pennsylvania Attorney General Tom Corbett has filed a lawsuit against a New Jersey couple who run two Value Kia locations in Southeastern Pennsylvania. This Pennsylvania lawsuit accuses the couple of using false and misleading advertising, failing to honor guarantee and warrantee agreements, and selling defective vehicles. This suit was brought by the Attorney General in response to dozens of complaints filed by consumers in the Philadelphia area and Berks, Chester, New Jersey, Delaware, Lehigh, Montgomery, and Lancaster counties.
According to the lawsuit, defendants Oleg and Angela Shtutman and Metro Auto Sales, Inc, are in violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law and the Automotive Industry Trade Practices. Investigators say the defendants issued misleading and false advertisements in print, radio, television and the internet. These ads promised free gifts, rebates, and other incentives to prospective new and used car buyers.
The ads promised big things. They included such claims as: “YOU CHOOSE! $1500 cash with any vehicle purchase or 60 foot color projection television,” “Up to $12,000 off new cars,” and “Free Vehicle with any vehicle purchase!” Other ads offered gifts such as free gas for a year, 60 percent off new cars, and five-carat diamond tennis bracelets.
According to Corbett, the ads were designed to lure people in with promises of great deals and gifts, yet the defendants had no intention of making good on these offers. Once a consumer arrived at the Kia dealership, they would be told they had to meet a number of qualifications to be eligible for the deals. It was difficult, if not impossible, for consumers to meet any or all of these requirements.
For example, one Pennsylvania couple filed a complaint after being denied the $12,000 rebate offered in the newspaper advertisements. After test-driving a new Kia vehicle, they were informed they were not eligible for the rebate because they had not owed a Kia vehicle before. This stipulation was not disclosed in the ad.
In other cases, the defendants lied to consumers about the safety and “roadworthiness” of their advertised vehicles. The defendants sold vehicles with auto defects such as faulty brakes, airbags, engines, and transmissions. Once these problems were noticed, the defendants refused to repair problems covered by guarantees and warrantees. If repairs were made under a warrantee, the defendants would charge the vehicle owner anyways.
The defendants have been charged with a slue of other fraudulent business practices including failure to provide required information to new buyers, failing to provide registration and license plates, and other unlawful actions.
Pennsylvania Attorney General Corbett, says, “The use of undisclosed conditions and other deceptive sales tactics,” not to mention other wrongful practices, “are illegal in Pennsylvania and hurt the auto industry especially those dealers who comply with the law.”
Through this civil lawsuit, the state requests that the court order the defendants to: pay full restitution to those who have been wronged by the defendants, pay civil penalties of $1,000 per violation and $3,000 for violations involving people older than 60, forfeit all profits made through wrongful business practices, and pay for the costs of the investigation.
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