Attorney General files lawsuits against auto dealerships alleging unfair consumer pricing practices
PROVIDENCE, R.I. – Attorney General Peter F. Neronha announced that his Office has filed lawsuits against two auto dealerships for allegedly engaging in unfair consumer pricing practices in violation of Rhode Island’s Deceptive Trade Practices Act (DTPA). In the lawsuits, filed this week in Providence County Superior Court, the Attorney General is seeking a court order to halt further conduct, obtain restitution for consumers where applicable, and impose monetary penalties for violating the DTPA, the state’s principal consumer protection law.
As alleged in the complaints, auto dealerships Grieco Honda and Grieco Toyota have engaged in deceptive pricing practices directed at prospective car buyers in Rhode Island. Grieco Honda is alleged to offer an advertised price for a vehicle, only to refuse to honor that price and instead charge a previously undisclosed “addendum fee” as high as $5,000. Grieco Toyota is alleged to deceptively advertise vehicles for sale at “wholesale prices” and represent that buyers could “pay what we pay going to auction.”
“Purchasing a car is always a challenging experience, and that is particularly true in today’s market, where the availability of new and used cars alike is at one of the lowest points in our nation’s history. Accordingly, it is now more important than ever that car dealers treat Rhode Islanders fairly and refrain from advertisement and selling practices designed to confuse and mislead them,” said Attorney General Neronha. “As alleged in the Superior Court complaints filed by my Office, these two dealerships have done exactly that. This Office will continue to act on behalf of Rhode Islander consumers whenever and wherever necessary to ensure that the bargaining process is fair and that the playing field is level. Most businesses in Rhode Island play by these basic rules. The comparatively few that don’t should know that this Office, now empowered by the 2021 changes we sought to the state’s consumer protection laws, is prepared to make sure they do.”
Special Assistant Attorney General Stephen N. Provazza and Investigator Tayla Martins of the Consumer and Economic Justice Unit are handling the case on behalf of the Office of the Attorney General.
As alleged in the complaint, the defendant is unfairly and deceptively advertising prices for vehicles and then refusing to sell them at those prices or demanding that the consumer pay thousands of dollars in additional, undisclosed fees. An investigation by the Attorney General revealed that, on multiple occasions, salespersons communicated that vehicles for sale were subject to a previously undisclosed “addendum fee” of $5,000.
This practice is deceptive and unfair to customers who rely on the prices promised by the defendant and are then either prevented from buying the vehicle at that advertised price or are left paying thousands of dollars more than they expected.
The Attorney General is seeking: 1) a court order to permanently halt the defendant from advertising false and misleading prices for vehicles, refusing to honor advertised prices, and advertising prices without disclosing additional fees; 2) restitution to Rhode Islanders who paid more than the advertised price; 3) civil penalties of up to $10,000 per violation of the DTPA; and 4) costs and attorneys’ fees.
As alleged in the complaint, the defendant is unfairly and deceptively advertising that it is selling vehicles at “wholesale prices” and that car buyers could “pay what we pay going to the auction.” State rules and regulations governing auto dealers prohibit the use of deceptive terms like “wholesale prices” in vehicle advertising – which also amounts to an unfair or deceptive act under the DTPA.
As of last week, the defendant listed over 100 vehicles for sale on their website under these misleading advertisements.
The Attorney General is seeking: 1) a court order to permanently halt the defendant from advertising vehicles at “wholesale” or “dealer cost” prices; 2) civil penalties of up to $10,000 per violation of the DTPA; and 3) costs and attorneys’ fees.
Deceptive Trade Practices Act
Following its enactment in 1969, Rhode Island’s consumer protection law, the DTPA, was eroded by a series of court interpretations to the point where it earned the state the distinction from the National Consumer Law Center as being one of the “terrible two” jurisdictions in the country.
In 2021, Attorney General Neronha worked with co-sponsors Representative Charlene M. Lima (D-Dist. 14, Cranston, Providence) and Senator Stephen R. Archambault, (D-Dist. 22, Smithfield, North Providence, Johnston) as well as House and Senate leadership and members of the General Assembly to pass legislation that restored the authority of the Office of the Attorney General to protect Rhode Island consumers against violations of the DTPA.