Owners of eight Garden State franchised dealerships already punished by the New Jersey Division of Consumer Affairs 15 years ago entered into a consent order this week that included a settlement of $1.8 million, plus consumer restitution.

New Jersey officials explained the settlement resolves a state investigation into what they described as alleged deceptive sales tactics in connection with a trio of activities, which included:

— Failing to disclose existing mechanical defects or past damage to used vehicles

— Charging for supplemental warranties and other costly “after-sale items” without customers’ consent

— Failing to honor the negotiated or advertised prices for vehicles

Entering into the order were owners Carmelo Giuffre, of Brooklyn, N.Y., and Ignazio Guiffre, of Colts Neck, N.J.

The eight stores covered in the investigation included Route 22 Toyota, Route 22 Honda, Route 22 Nissan and Route 22 Kia, all located in Hillside, N.J., along with Hudson Honda of West New York, N.J., Hackettstown Honda, Freehold Hyundai and Freehold Chrysler Jeep.

“This settlement is a tremendous success for the consumers who were affected by the alleged deceptive sales tactics,” New Jersey acting attorney general John Hoffman said. “The consequences, including a civil penalty of $1.8 million, are particularly appropriate in light of the fact that the owners of these dealerships allegedly violated an earlier settlement in which they had promised not to engage in such practices.”

In a message sent to Auto Remarketing on Wednesday, dealership spokesperson Rich Tauberman discussed why the stores agreed to a consent order and what programs have already been implemented to inspire greater consumer confidence in the automotive sales industry.

“This consent order reflects a desire by Route 22 Auto Sales and its affiliated dealerships to avoid costly and prolonged litigation, focus on its business and build on the transition to 'One Price,' an innovative, transparent and negotiation-free sales process," Tauberman said.

“Three years ago, the dealerships were among a group of dealers that began a process to dramatically alter automotive sales for the benefit of the consumer," he continued. "After careful and deliberate planning, earlier this year, the Route 22 dealerships launched 'One Price,' which eliminates the decades-old auto dealer standard of pressure-filled negotiations on purchase price, after-market items and financing along with ending the reliance on commissioned-based sales staff.

“The program redefines the car buying experience and puts a new focus on the consumer and ease of purchase," Tauberman went on to say. "The Route 22 dealerships are confident that offering every customer the same price based on independent and public, third-party data will promote transparency and alter the culture in automotive sales in a way that inspires greater consumer confidence.”

Despite the recent changes, New Jersey officials alleged that actions taken by the dealerships directly violated a prior settlement that Carmelo and Igazio Giuffre and their dealerships reached in 1999 after the state regulators received similar consumer complaints about deceptive practices by the dealerships.

The Division of Consumer Affairs indicated that it received complaints from “numerous” consumers who documented a host of allegations against these dealerships.

In addition to what he called “bait-and-switch tactics” and “add-on sales without consent,” the Division of Consumer Affairs acting director Steve Lee noted that consumers made several allegations, including

—The dealerships failed to refund deposits in a timely manner after consumers either canceled the sales or were denied financing.

— Advertised vehicles without including required information such as vehicle identification numbers, thus preventing consumers from being able to check the vehicle’s history of damage.

— Failed to provide consumers with motor vehicle titles and registrations in a timely manner.

“Buying a new or used vehicle can be an intimidating process, especially for consumers who lack the ability to independently learn about a used car’s condition or history before making a decision,” Lee said.

“Our state laws protect all consumers by ensuring they have access to all relevant information when buying a motor vehicle,” he continued. “This settlement is intended to ensure that these dealerships will not again violate our laws or deceive potential customers.”

In February 1999, Carmelo and Ignazio Giuffre, as well as Route 22 Toyota, Route 22 Honda and Route 22 Nissan entered into a settlement in which the defendants agreed to pay $450,000, including $250,000 as a compensatory fund for consumers, resulting from similar complaints by consumers.

The new settlement announced this week requires a payment of $1.8 million, which includes $1,733,059 in civil penalties and $66,941 to reimburse the state’s investigative costs and attorneys’ fees.

In addition to that payment, New Jersey officials said the defendants must work to resolve the complaints of 45 consumers who documented their allegations with the Division of Consumer Affairs. The defendants shall provide restitution or, if they dispute a consumer’s complaint and requested relief, shall notify the division, which will refer the matter to its Alternative Dispute Resolution Unit for binding arbitration.

Additionally under the settlement, authorities pointed out the dealers must, at their own cost, hire a state-approved compliance monitor for two years. The state wants this monitor to handle several tasks, including:

— Review compliance with all applicable state and federal laws, rules, and regulations, and with the dealers’ own internal policies and procedures.

— Review the dealers’ policies and procedures and make any recommended changes.

— Facilitate the resolution of additional consumer complaints.

— Provide written quarterly reports to the Division of Consumer Affairs.