Connecticut Attorney General, DCP Sue Shelton Car Dealership Alleging Almost 300 Instances Of False Advertising

August 24, 2007 -- Connecticut Attorney General Richard Blumenthal and Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr. today announced that he has sued Crabtree Subaru and Crabtree Dodge of Shelton alleging almost 300 instances of false and misleading advertising since 2004 -- charges that could result in hundreds of thousands of dollars in civil penalties.

The claims in the 24-count lawsuit filed July 10 could be expanded to cover new allegations, Blumenthal said.

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Blumenthal's action charges Crabtree car dealerships with making at least 293 illegal or false claims -- loans with zero or $1 down payments, payments as low as $37 a month, limited time discounts as deep as 70 percent -- in newspaper, television and radio advertisements between 2004 and 2007. The dealership also advertised 0 percent financing and rebates up to $7,000 without fully disclosing conditions and restrictions.

Some ads included phony testimonials from nonexistent customers. The lawsuit alleges that virtually no one received the deep discounts or special deals touted in the ads.

"Our lawsuit will be expanded as necessary to cover outrageous more recent reports of wrongdoing by these dealerships and individuals involved with them," Blumenthal said. "We will seek effective remedies for any consumer harmed by phony promotions, false discounts, deceptive financing, bogus testimonials, and a range of apparently deliberate and devious illegal practices.

"We contend that Crabtree cynically deceived consumers, using the mirage of deals and discounts to lure customers into its showrooms. Consumers discovered that special offers and major markdowns disappeared the moment they walked through the dealership's doors. Crabtree brazenly buttressed its false and misleading claims -- zero down, 70 percent discounts -- with phony testimonials from phantom customers. These ads were not isolated incidents, but a systemic, sustained effort to mislead and misinform.

"I will fight to assure that Crabtree pays for hoodwinking the public, sending a powerful message to car dealers and other businesses that the state will not tolerate false and misleading advertising. A referral for criminal investigation is a distinct and real possibility."

Commissioner Farrell said, "Advertising that is deceptive to consumers is a great concern to the Department of Consumer Protection - and that is why we brought this lawsuit. We are also concerned about any consumers that may have issues resulting from the closure of the dealership, and will work with the Attorney General to amend the lawsuit as necessary."

Crabtree's alleged false or illegal claims include:

* Consumers could pay as little as $37 a month if they agreed to "road test" a "pristine" new or used car up to four years and allow the dealership to regularly "inspect" the vehicle. In fact the $37 a month payment was only for three to six months after which the consumer had to make the full payments.

* The dealership claimed to offer consumers for a limited time discounts available to U.S. government employees. In reality, the dealership did not offer such discounts.

* Consumers could receive 50 to 70 percent off "original prices" on vehicles the dealership said it had purchased from recently liquidated local and national rental car companies. In fact, the dealership did not buy vehicles from bankrupt rental car companies.

* Similar bogus claims about obtaining and offering large discounts on repossessed or bank-owned vehicles.

Blumenthal's lawsuit alleges at least 293 separate violations of Connecticut Unfair Trade Practices Act (CUTPA) -- sometimes two or three per advertisement. The maximum penalty for each CUTPA violation is $5,000.

Source: Connecticut Attorney General