AG Shapiro: Faulkner Honda to pay restitution to those who were sold ‘valueless’ dealership warranties
HARRISBURG — Attorney General Josh Shapiro today announced a settlement that includes restitution for consumers who were victimized by deceptive and unfair sales of a valueless warranty product by a Harrisburg motor vehicle dealership, Paxton Associates, Inc. d/b/a Faulkner Honda.
An investigation by the Attorney General’s Bureau of Consumer Protection revealed the dealership, for a certain period of time, deceptively marketed, negotiated, and sold valueless dealership warranties to customers. Consumers paid about $1,000 on average for these warranties, which catered to consumers entering into short-term lease agreements for new vehicles and had no meaningful value beyond the manufacturer’s warranty that was already included in the advertised purchase price. This was in violation of the Automotive Industry Trade Practices regulations and the Pennsylvania Consumer Protection law.
“This dealership took its customers for a ride by encouraging them to purchase an additional warranty that had no value,” Attorney General Josh Shapiro said. “My office is fighting to ensure that consumers are able to make informed purchases and protect against deceptive sales tactics, which bilk customers out of their hard earned money. If you were a customer of the Faulkner Honda dealership and believe you have been a victim of this deceptive sales tactic, you may be eligible for restitution and should contact my Office.”
Faulkner sells new American Honda Motor Company manufactured vehicles, which come with a standard, 36 month, 6,000 mile Honda manufacturer’s warranty. During the later stages of the sales transaction, the dealership offered and sold an additional dealership warranty, the New Vehicle Coverage Warranty, for new, Honda vehicles purchased or leased at Faulkner’s dealerships. This is a practice that is commonly referred to as an “upsell,” “back end” or “add on.”
Consumers paid a substantial amount of money beyond the advertised purchase price for the additional dealership warranty, which excluded any warranty coverage claims covered by the manufacturer’s warranty. The manufacturer’s warranty provided the same term of coverage, 36 months and 36,000 miles, and was more comprehensive than the Faulkner warranty. The Bureau found for new, Honda vehicles leased for a term of 36 months, the Faulkner warranty failed to provide any meaningful value particularly considering the amount of money paid by the customer. The investigation also revealed that Faulkner failed to disclose this information on occasion, impairing the customers’ ability to make an informed decision regarding a valueless add on warranty product during the back end of a sales transaction.
As part of the Assurance of Voluntary Compliance settlement, Paxton Associates, Inc. d/b/a Faulkner Honda has agreed to pay restitution for eligible consumers who were affected.
“There is a 90 day window for consumers who believe they have been a victim of this deceptive sales tactic to file a complaint with my Bureau of Consumer Protection at http://www.attorneygeneral.gov,” Attorney General Josh Shapiro said. “Contact my Bureau of Consumer Protection at 800-441-2555 or firstname.lastname@example.org so your complaint can be evaluated.”
Source: Pennsylvania Attorney General’s Office