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A very scary lawsuit was recently filed by the Minnesota Attorney General against an independent dealer and its owner, individually, seeking millions of dollars of consumer refunds as well as injunctive relief and penalties. This is a "real world" example of the type of "bet the business" lawsuits that we warn dealers about.  The allegations against the owner claim that he "directed, controlled, participated in, acquiesced to, and knew or should have known about, the unlawful conduct described in this complaint, and is therefore personally liable under Minnesota’s consumer protection statutes for his participation in various unlawful schemes". Remember, these are allegations and the defendants will have an opportunity to defend themselves.

Lawsuit Allegations

The lawsuit alleges that this dealer (1) misrepresents that its used cars are certified when they are not; (2) illegally adds expensive vehicle service contracts to consumers' purchases without their consent; (3) refuses to provide warranties that it is required to provide by law; and (4) fails to make accurate "Buyer's Guide" disclosures and provide such disclosures in Spanish, as required by law; and (5) conducts business under an unregistered trade name that heavily targets and exploits Spanish speakers.

We Sure Wish They'd been Paying Attention

Just in the past year, we've written or spoken about all of these claims extensively. Too bad this dealer didn't undertake the type of proactive compliance review that we encourage. If they'd been paying attention, they'd know:

  • Vehicle certification claims are dangerous, regulators frown upon the use of the word, and many state deceptive acts and practices statutes address such claims;

  • it's vital to have proper paperwork that reflects the voluntary nature of the service contract or any "add-on";

  • car dealers had better be familiar with their laws addressing car sales and warranties and honor any required warranties;

  • If any part of the transaction is negotiated in Spanish, then the dealer is required to provide a Spanish Buyer's Guide;

  • The details matter, if a dealership is using a different name or "DBA" for marketing purposes, it had better take the necessary steps to register that name in accordance with state law.

Don't Let This Happen to You

Are you "whistling through the graveyard", just hoping to get by?  

Do you think "this will never happen to me"? 

Do you lie to yourself by thinking "I'm too small to be noticed"?  

Are you hoping that ignorance of the law will be a viable defense? 

Bet on Ignite Instead of Betting Your Business


Our team of experts can help protect your business and avoid the dangers of lawsuits and regulatory scrutiny. Whether it's improving your deal paperwork, adjusting your business practices, reviewing advertising and websites, creating and implementing controls, or serving as your trusted compliance advisor, we will make an impact. Don't delay, call today.

Please reach out to Ignite at

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