Clearwater dealers added on services often without buyers knowing, the state says.
By JEFF HARRINGTON
Published October 30, 2004
About $1.7-million in refunds has been doled out to more than 1,200 Central Florida residents who unwittingly were charged for extra insurance products while buying an automobile.
The refunds are the culmination of the Florida Department of Financial Services' two-year investigation into sales practices at two Clearwater dealerships, Clearwater Mitsubishi and Clearwater Toyota, both on U.S. 19 N.
"Floridians shopping for a car deserve to be treated fairly and dealt with honestly," said Florida Chief Financial Officer Tom Gallagher, who oversees the state department.
Sonic Automotive Inc., a Charlotte, N.C., company that owns the dealerships, referred calls to chief financial officer Lee Wyatt, who could not be reached Friday.
The refunds affected car buyers at the two dealerships between April 1998 and March 2002 who were not advised they were being charged extra for add-ons such as vehicle service agreements, gas protection plans and scheduled maintenance plans.
Gallagher spokesman Justin Glover said Sonic reviewed its records and determined many customers paid thousands of dollars for unwanted services.
JoAnn Kennedy of Seminole received one of the highest refunds, more than $4,000, for products she did not know she had paid for.
Kennedy, who bought a Toyota Camry in 1999, said she received her refund nearly a year ago as one of the first to benefit from the state probe. Investigators told her they had trouble finding many of the overcharged customers. "They've been trying to finish this up a long time," she said.
In some cases, investigators said, customers were asked to sign blank applications for the add-on products but were told there was no charge. Others never knew they bought the add-ons.
Clearwater resident Michael Ladrique, for one, told investigators he was never told about an additional cost for extra coverage when he bought a 1998 Mitsubishi.
As part of a deal with the state, Sonic agreed to give customers buying add-on products a copy of forms approved by the state and require that customers sign only completed forms.
The state has probed other industries for charges of deceptively selling add-on insurance, but this is the first case involving an auto dealer, Glover said.
Gallagher's office said some of the abuses were first reported to the department by investigative reporter Mark Douglas of WFLA-TV in Tampa. The state investigated another Sonic-owned dealership but did not find it was using similar sales tactics.
Consumers who believe they know of similar cases are urged to call the financial services department's toll-free hotline at 1-800-342-2762.
