Peter C. Harvey, Attorney General

Division of Consumer Affairs
Reni Erdos, Director

For Immediate Release:
April 14, 2004

For Further Information Contact:
Genene Morris, Jeff Lamm
973-504-6327

NEWARK - Attorney General Peter C. Harvey has filed suit, through the Division of Consumer Affairs, against several corporations within the DCH Auto Group alleging the chain of auto dealerships repeatedly violated State consumer protection laws by engaging in fraudulent business practices, including failing to disclose prior damage to motor vehicles, misrepresenting used auto parts as new and misrepresenting the mechanical condition of used vehicles.

The 13-count complaint, filed in Middlesex County Superior Court, Chancery Division, by the Attorney General and Consumer Affairs Director Reni Erdos, names:

• DCH Imports LLC - 654 Bloomfield Ave., Montclair, (d/b/a Montclair Auto Group, DCH Montclair Volvo and Montclair Volvo);
  
• DCH Freehold LLC - 4268 Route 9 South, Freehold (d/b/a DCH Freehold Nissan);
  
• Paramus World Motors LLC - 120 Route 4 West, Paramus (d/b/a DCH Paramus Honda);
  
• Daron Motors LLC - 500 Route 35 South, Red Bank (d/b/a Academy Honda);
  
• Sharlene Realty LLC - 1504 Route 1, North Brunswick (d/b/a Brunswick Toyota); and
  
• DCH Motors LLC - 200 Route 36, Eatontown, (DCH Kay Honda).

The companies, which maintain a Web site at www.DCHauto.com, are owned, operated, managed and/or controlled by Shau-Wai Lam, president and CEO, and Billy Wong, vice president. DCH Auto Group includes dealerships in New Jersey, New York and Northern California. The defendants advertise and conduct business throughout Bergen, Essex, Middlesex and Monmouth counties. The suit alleges that while selling and leasing new and used vehicles, the defendants violated New Jersey's Consumer Fraud Act, state motor vehicle advertising regulations, state automotive repair regulations and a federal odometer disclosure statute.

"The defendants allegedly misled consumers or failed to disclose material facts that would have enabled consumers to make informed decisions," Attorney General Harvey said. "We will not tolerate such business practices in New Jersey."

"You can't deceive consumers in order to secure a sale or lease agreement," Director Erdos said. "Some of the alleged violations had the potential to affect the value and/or safety of the vehicles."

The complaint alleges, for example, that DCH Freehold, DCH Imports, Paramus World Motors and Daron Motors failed to disclose to certain consumers that the used motor vehicles they were buying had been involved in accidents. DCH Imports allegedly failed to disclose to a consumer that air bags had been removed from a used vehicle and not replaced. Sharlene Realty, in at least one instance, allegedly signed an odometer disclosure statement that falsely represented that the mileage of the motor vehicle was lower than the actual mileage.

The complaint also alleges, among other things, that defendants violated State laws by:

• failing to provide written estimates and to obtain authorization from consumers prior to commencing repair work;
  
• failing to itemize parts on an invoice as new, used or rebuilt;
  
• failing to honor the advertised price for a vehicle or any other similarly equipped vehicle;
  
• falsely informing consumers that an advertised motor vehicle was available for sale or lease when, in fact, the vehicle had already been sold or leased.

The complaint further alleges that Paramus World Motors' alleged activities have violated a consent order it entered into with Consumer Affairs in 2001. That order, which stemmed from alleged violations of rules governing motor vehicle advertising, required Paramus World Motors to pay nearly $4,900 in penalties and costs. The company also agreed that future violations of the Consumer Fraud Act would subject it to enhanced monetary penalties.

The State's suit seeks to have the defendants pays civil monetary penalties, consumer restitution and costs. It also seeks to have Paramus World Motors pay enhanced monetary penalties of up to $20,000 for each violation of the Consumer Fraud Act.

Deputy Attorney General Jeffrey Koziar of the Division of Law is handling this matter for the State.