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Monday, 16 October 2017 16:42

Lawsuit Filed Against KY Dealership for Alleged Deceptive Business Practices

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A Kentucky car dealership has been accused of engaging in “unfair and deceptive practices that harmed Kentucky consumers,” according to a lawsuit filed in early August by the state’s Attorney General, Andy Beshear

More than 140 complaints were received by the attorney general’s Office of Consumer Protection and/or the Better Business Bureau against The United Group, also known as Auto Plaza USA


“These complaints support allegations that the business engaged in conduct that violates the Kentucky Consumer Protection Act by representing to the consumer, both verbally and through written contracts, that the sales price of their vehicle included all taxes and fees owed when instead the business failed to remit the correct usage tax amount on more than 1,400 consumer sales,” said Beshear. 


According to the lawsuit, which was filed August 2 in Fayette Circuit Court, the Nicholasville business collected vehicle usage taxes from customers between 2012 and 2016, 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 had already paid to the defendant,” said Beshear. 


Allegedly, the defendant’s documents included a Buyer’s Order as well as an Affidavit of Total Consideration, which is the form sent to county clerks for tax collection. The purchase price written on the Affidavit of Total Consideration “did not reflect the actual purchase price of the vehicle as paid by the consumer,” the lawsuit stated.


Auto Plaza is also accused of charging consumers a “document and customer service fee” of $489 but allegedly failed to perform the services accurately. 


“Auto Plaza’s conduct constitutes unfair, false, misleading or deceptive acts or practices in violation of the Kentucky Consumer Protection Act…” according to court documents. 


“The enforcement of consumer protection laws helps not only consumers, but also businesses that follow the law,” said Beshear. “An ethical business should not have to compete with those that cut corners.” 


The attorney general’s office is seeking damages from The United Group that include approximately $465,000 in restitution for customers who incurred additional unpaid usage tax liabilities and $685,000 for those affected by the fee allegedly charged by the dealership. 


“We expect business owners to be honest and follow the law,” said Beshear. “We want to send a strong message that those who deceive Kentucky families and then try to turn and look the other way will be held accountable.” 


On Sept. 8, The United Group (Auto Plaza USA) filed a motion with the court to change the venue from Fayette County to Jessamine County, where the defendant runs its principal place of business. 


“Each sale which is the subject matter of this action took place in Jessamine County, Kentucky, and all determination of the amount of sales tax due on each sale were made in Jessamine County. Jessamine County is the ONLY county wherein venue over this action is proper,” the court records stated.


Autobody News will continue to follow this case.