A Los Angeles automobile dealership chain with locations in Universal City, Glendale, Valencia and North Hollywood as well as Los Angeles has agreed to pay $3.6 million in a settlement with the Federal Trade Commission relating to deceptive advertising charges, according to the commission.
Sage Automotive Group and two of its employees were charged with using deceptive advertising and online reviews, and deceptive and unfair sales and financing practices, according to the FTC.
The settlement order, which still needs approval from the U.S. District Court for the Central District of California, will prohibit the dealerships and individuals from making misrepresentations through advertising, add-on products, financing and endorsements or testimonials. It will also mandate them from unlawful conduct on cancelled sales, repossession or debt collection, unless they intend to take action. They are also prohibited from violating other business leasing and lending laws.
Sage has nine dealerships. The local ones include Universal City Nissan, Glendale Nissan and Glendale Infiniti, Mercedes-Benz of Valencia and Sage North Hollywood, which does business as Sage Pre-Owned. In addition to the company, two individuals – Joseph Schrage, also known as Joseph Sage and Michael Schrage, also known as Michael Sage – were named in the FTC’s original complaint.
In its September complaint, the FTC charged the dealerships and the Sages with what it referred to as “yo-yo” financing tactics, which included using “deception or other unlawful pressure tactics to coerce consumers who have signed contracts and driven off the dealership lots into accepting a different deal.” The commission also claimed the defendants “packed extra, unauthorized charges for ‘add-ons,’ or aftermarket products and services, into car deals financed by consumers.”
Under the settlement proposal, the defendants’ payment would return the money to affected consumers.