FROM:
Stephen Gibbons, Assistant District Attorney  CONTACT PERSON:
Robin B. Wakshull, Deputy District Attorney
Consumer Protection Unit
(408) 792-2584   For Release on July 30, 2003   DISTRICT ATTORNEY SETTLES CIVIL CASE AGAINST TWO AUTO DEALERS   The Santa Clara County District Attorney’s Consumer Protection Unit has settled a civil lawsuit against two auto dealerships in Cupertino and Los Gatos.  Without admitting wrongdoing, the businesses consented to the entry of judgment and cooperated with the District Attorney’s Office in the investigation of the consumer complaints.  The final judgment, which was signed by Superior Court Judge Kevin E. McKenney, requires Anderson Cupertino, Inc. and Anderson Chevrolet Los Gatos each to pay $45,000 in civil penalties and costs, to abide by the terms of a permanent injunction to prevent  future violations of the law, and to establish a restitution program for eligible customers who purchased an advertised vehicle between October 1998 and July 2000.   The primary pleading in the complaint alleges that between October 1998 and July 2000, the two automobile dealerships engaged in untrue and misleading advertising and unfair competition in connection with the sale of vehicle theft protection and registration programs, often referred to as a “VTR.”  The VTR program consisted of:
  1. etching a proprietary identification number on the vehicles windows, and
  2. providing a monetary benefit, in addition to a vehicle owner’s regular car insurance, in the event that the vehicle is stolen and not recovered or is recovered and declared a total loss.
Although the VTR program was characterized as an option, a number of customers stated that they were told that purchase of the VTR was mandatory or that etching was already on the car and they had to pay for it if they wanted the car.  The average cost of the VTR was $219.   California Vehicle Code section 11713.1(e) requires that advertised vehicles must be sold at or below the advertised total price.  A seller may not require that the buyer purchase any other equipment, accessories or programs in order to buy the advertised car.  Requiring the purchase of the VTR at additional cost on those cars that were advertised at a specific price would violate Vehicle Code section 11713.1(e).  However, the statute does provide that the “advertised total price” does not include certain enumerated fees such as taxes, vehicle registration fees, tire fees, and document fees.
 
As part of the settlement of this matter, customers who purchased an advertised vehicle between October 1, 1998 and July 31, 2000 and purchased the VTR program may be eligible for a refund through the restitution program.  Information about the restitution program will be mailed directly to those customers within the next 90 days.  Under the terms of the program, eligible consumers may be allowed to cancel the VTR program and receive a refund of the fee they paid.  In order to be considered for a refund, customers must carefully follow the instructions they receive and return necessary forms by the stated due date.  

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