Potential problems with vehicle documentation and state tax collection could cost a Kentucky dealership more than $1.1 million in restitution.
Kentucky attorney general Andy Beshear filed a lawsuit on Wednesday in Fayette Circuit Court against The United Group, which operates as Auto Plaza USA, a large independent dealership in Nicholasville. The lawsuit is charging the dealership with deceptive business practices.
According to the lawsuit, the defendant, with the dealership located at 2000 Vince Rd., in Nicholasville, violated Kentucky’s Consumer Protection Act by defrauding more than 1,400 customers.
“Every Kentuckian deserves an honest and fair car buying experience,” Beshear said. “Today’s action sends a strong message that my office will defend Kentucky families against bad actors and hold dishonest businesses accountable.”
According to the lawsuit, between 2012 and 2016, the defendant collected vehicle usage taxes from customers and then falsified documents in order to avoid making the correct payment to the Kentucky Department of Revenue. As a result, customers received delinquent tax notices from the department and left owing a tax bill that, in many cases, they already paid to the defendant.
The lawsuit also alleges the defendant charged each customer a $489 fee for preparation of documents and services that were not properly performed.
Beshear’s office is seeking damages from the defendant, including approximately $465,000 in restitution for the customers who incurred additional unpaid usage tax liabilities, and $685,000 for customers affected by the bogus customer fee.
The office of the attorney general launched an investigation into the company’s practices and filed suit following more than 100 consumer complaints received by both the attorney general’s office and the Better Business Bureau (BBB).
“When calls and complaints started coming into our BBB a few months ago from Auto Plaza USA customers alleging the same unpaid tax problem, we believed there was a serious issue,” said Kim Sweazy, director of operations for the BBB serving central and eastern Kentucky.
“We made the attorney general’s office aware of our concerns, and they worked swiftly toward today’s action,” Sweazy continued. “We applaud the attorney general’s commitment to the citizens of Kentucky and value our partnership with his office in protecting the consumers of this great commonwealth.”