With the recent launch of the Consumer Financial Protection Bureau, cases dealing with dealership advertising and alleged sales fraud are popping up all over the country.

And in one of the latest cases to hit the courtroom, a New Jersey dealership has been ordered to disclose damage to and prior use of the vehicles it is offering for sale, after the Office of the Attorney General and New Jersey State Division of Consumer Affairs filed suit against the dealership.

Basically, the state alleges that Lencore Leasing, Inc., which does business as North Jersey Auto Mall and DCH Motors, and Lenny Belot, the owner/operator of the dealership, were not being entiretly forthcoming regarding prior damage to vehicles.

(A story on NorthJersey.com had Division of Consumer Affairs officials emphasizing that the used-vehicle dealership is not connected at all to the DCH Auto Group.)

In its five-count Verified Complaint, the state alleges the Patterson, N.J., dealership violated the Consumer Fraud Act, Used Car Lemon Law and Motor Vehicle Advertising Regulations in their advertisement, offering for sale and sale of used motor vehicles.

Highlighting what brought this case to light, to date, the Division of Consumer Affairs noted it has received 14 consumer complaints as to defendants, three of which were forwarded from the Passaic County consumer affairs office and one of which was obtained from the Better Business Bureau.

Commenting on the complaint, Attorney General Jeffrey Chiesa, said, "Used cars are not inexpensive. Consumers who are spending thousands of dollars for a used vehicle are legally entitled to be told if the vehicle has sustained prior damage or if it’s been used as a fleet or rental vehicle.”

Complaints of ‘Undisclosed Damage’

Delving into the complaints in more detail “the filed Verified Complaint identifies 51 used vehicles that defendants allegedly offered for sale which, by the state’s calculation, had a cumulative $213,758 in undisclosed damage,” the NJ Division of Consumer Affairs reported.

Moreover, the state alleges that, in some cases, consumers were led to believe the cars were in much better shape than they actually were.

For example, the state alleges that consumers were told that vehicles were "absolutely mint in and out” or were “in pristine condition” when such was apparently not the case.

Moving along, the complaint also alleges that mechanical defects were sometimes kept from consumers and warranties were promised on vehicles that were, in fact, not covered.

Specifically, the state alleges “that the defendants’ online advertisements failed to include the required disclosures of prior use and prior damage and that defendants violated the Used Car Lemon Law by allegedly failing to disclose existing mechanical defects in used motor vehicles prior to sale.”

“The defendants also allegedly misrepresented that vehicles were covered by a warranty when such was not the case,” the N.J. Division of Consumer Affairs further reported.

And it seems as if the issues may have not stopped there, the Verified Complaint also alleges that the defendants failed to respond to consumer requests for refunds or reimbursements for repairs that consumers paid for; failed to include promised equipment such as navigation systems and floor mats in the purchased vehicles; and failed to disclose that the sales price did not include licensing and registration fees, and taxes, officials explained.

"A nice wax job can make any vehicle look good. But below the surface, we allege that real and potentially dangerous problems existed for Lencore’s consumers,” said Eric Kanefsky, acting director of the State Division of Consumer Affairs, stressing the severity of the case.

"We believe some purchasers might have reconsidered their decision to buy if they had known the vehicle had mechanical defects or had been used in fleet or rental service,” he added.

What’s in the Cards?

And what are in the cards for the dealership and its staff?

The New Jersey Division of Consumer Affairs reported that last Friday, Superior Court Judge Mary Margaret McVeigh granted the state’s request to stop the dealership from advertising and selling used vehicles without disclosing prior damage and/or prior use, pending a hearing on the state’s request for preliminary injunctive and other relief.

Furthermore, McVeigh also granted the state’s request for the appointment of a temporary monitor for the dealership.

But the case will continue to evolve, as the judge has scheduled a June 22 hearing to decide whether the orders should be made permanent.

As of press time, Belot had not responded to a message left with the operator at North Jersey Auto Mall.