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Leonia Used Car Dealer Fined, Agrees To Arbitration With Defrauded Buyers

Luxury Haus
Luxury Haus Photo Credit: GoogleMaps

LEONIA, N.J. -- A Leonia used car dealer agreed Friday to change its practices, pay $20,000 in civil penalties and enter binding arbitration with consumers who say the dealership defrauded them through what the state attorney general called "chicanery."

Luxury Haus agreed to the terms to settle an investigation by the state Division of Consumer Affairs into dozens of consumer complaints over the past three years, state Attorney General Christopher S. Porrino said.

The plaintiffs said Luxury Haus -- located at the corner of Grand Avenue and Fort Lee Road -- refused to honor advertised prices of vehicles, sold vehicles without providing the required written warranties and practiced other deceptive tactics.

“For most people, buying a used car is daunting enough without having to worry about being preyed on by dealers engaged in the kind of chicanery Luxury Haus is accused of,” Porrino said.

A consent order secured by the DCA “will provide just relief through binding arbitration to customers who have been allegedly deceived by this dealership,” the attorney general said.

The Luxury Haus Inc. (“Luxury Haus”) -- also known as “Luxury Haus 46” and “Benz & Beemers of 46" -- violated the New Jersey Consumer Fraud Act (“CFA”), the Motor Vehicle Advertising Regulations, the Automotive Sales Practices Regulations, the Used Car Lemon Law, and the Used Car Lemon Law Regulations, state authorities said.

This included:

· Charging a consumer a mandatory fee for an optional service.

· Failing to install an anti-theft vehicle location service purchased by the consumer.

· Charging fees for documentary services without itemizing the price for each actual documentary service performed.

· Failing to cancel a consumer’s warranty and dent restore plan following the consumer’s requested cancellation.

· Failing to disclose prior vehicle damage.

· Misrepresenting the model of a used motor vehicle when contracting with a consumer.

The complaints against Luxury Haus were received from consumers in Bergen, Essex, Hudson, Morris, and Middlesex counties, as well as from Pennsylvania, New York, Massachusetts, and Georgia.

They are seeking restitution amounts varying from $3,500 to $13,400.

Under the Consent Order, Luxury Haus agreed to change the way it does business, including:

· Not engaging in unfair or deceptive business practices.

· Including the required warranty in its offer for sale or sale of a used motor vehicle.

· Maintaining documentation of all advertisements of motor vehicles leased or sold to consumers for 180 days from the date of lease or sale.

· Including in its advertisements the required statement that “price(s) include(s) all cost to be paid by consumer except for licensing costs, registration fees, and taxes.”

Also under the Consent Order, for the next year the Division will refer any new consumer complaints to Luxury Haus for resolution. If the dealership disputes a new complaint or request for relief, the matter will be referred for binding arbitration.

In addition to paying $20,000 in civil penalties, Luxury Haus has agreed to pay the Division $17,661 for its investigative costs and attorneys’ fees.

The State will suspend $12,422 of the settlement amount if Luxury Haus over the next year complies with the terms of the Consent Order, and does not violate the CFA, among other laws, Porrino said.

Consumers who believe they were deceived or misled in doing business with Luxury Haus can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.

Investigator Kelly Fennell of the Division of Consumer Affairs' Office of Consumer Protection conducted the investigation.

Deputy Attorney General Mark E. Critchley from the Division of Law's Consumer Fraud Prosecution Section is handling the case.

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