A New York dealer group that operates two franchised stores and an independent lot in the Big Apple filed a civil lawsuit against Autotrader, seeking more than $1.5 million in restitution.
According to the complaint obtained by Auto Remarketing on Friday, B&Z Auto Enterprises made allegations of false advertising, fraud, negligent misrepresentation, unjust enrichment, unfair and deceptive trade practices under federal and state law, and violations of the RICO Act — claims that Autotrader called “meritless.”
(Passed in 1970, the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO, is a federal law designed to combat organized crime in the United States).
B&Z Auto Enterprises includes Riverdale Chrysler Jeep and Eastchester Chrysler Jeep Dodge in the Bronx as well as New York Cars Direct in Larchmont, N.Y. B&Z Auto Enterprises legal representative, Bellavia Blatt & Crossett, filed the suit in U.S. District Court within the Eastern District of New York this past Wednesday.
The 32-page complaint alleges the group’s volume of search results pages (SRPs) and vehicle detail pages (VDPs) was inflated by 50 percent to 100 percent between the time B&Z Auto Enterprises first began using Autotrader in June 2010 and when it terminated the relationship on Sept. 1.
What B&Z Auto Enterprises claimed to be a noticeable decline in SRPs and VDPs beginning this summer triggered what germinated into the what the dealer group’s hopes to be a jury trial.
“In particular, Autotrader’s marketing and advertising communications emphasize, as their main selling point to dealers, a number of statistical metrics that are designed to convey the purported efficacy and benefits of the online advertising that Autotrader offers,” the complaint said.
“However, the ‘advertising reach’ statistics that Autotrader used to induce plaintiff B&Z and other dealers to purchase its online advertising services were in fact inaccurate and misleading,” the complaint went on to say.
Auto Remarketing reached out to Autotrader on Friday and a spokesperson said, “At Autotrader, we’re committed to growing our clients' businesses by connecting car buyers, sellers and owners and creating exceptional experiences. The allegations in this lawsuit are meritless, and we intend to defend ourselves vigorously.”
News of the suit appears to have first been reported in Automotive News.
Editor Joe Overby contributed to this report.