Three Grieco dealerships in Rhode Island must pay $557K for alleged deceptive sales practices.
Three Grieco Automotive Group dealerships must pay a combined $557,815 to consumers and the Rhode Island Office of the Attorney General as terms of an agreement settling deceptive practices claims. The agreement was filed July 26 in Rhode Island Superior Court.
The amount includes $457,815 in direct restitution to customers and $100,000 to the attorney general’s office for costs of the investigation and two lawsuits, according to a statement. Grieco said the refund process will be “seamless” with checks being “automatically sent to those affected.”
The assurance of voluntary compliance agreement resolved two lawsuits Rhode Island Attorney General Peter Neronha filed in March 2022. Neronha alleged Grieco Honda and Grieco Hyundai, of Johnston, R.I., and Grieco Toyota, of East Providence, R.I., automatically charged customers for add-ons not included in advertisements. Between Jan. 1, 2021, and March 18, 2022, more than 6,000 customers said they were charged $249 for a paint and fabric spray and warranty product known as Zurich Shield; the charge wasn’t mentioned until they were in the purchase process. Grieco said the product was “preinstalled” and “clearly disclosed on the itemized dealer invoice.” A Rhode Island Attorney General Office spokesman said customers were not successful in opting out of the $249 fee during the purchase process. Grieco argued that some customers were able to opt out.
“Grieco Honda, Hyundai and Toyota are pleased to have resolved this issue, and we are continuing to provide excellent service and quality vehicles to its customers,” the group said in a statement. “Although the dealerships do not agree with the [attorney general’s] findings, an agreement to amend certain trade practices was reached, without the dealerships admitting to any violation of any Regulations. The dealerships look forward to continue to sell and service quality vehicles in a consumer-friendly and professional atmosphere.”
The July agreement also alleged the three Grieco stores violated the Deceptive Trade Practices Act, charging customers more for vehicles than the price advertised on their website, later adding addendum fees and describing vehicles available at “auction” or “wholesale” prices in February and March 2022. The Rhode Island Department of Motor Vehicles prohibits dealers from using the world “wholesale” and implying vehicles are being sold at a dealer’s cost. Grieco disagreed with allegations regarding the addendum fees.
The agreement prohibits the dealerships from charging customers for products or services without express informed consent. They also cannot advertise a vehicle price that varies from the price in its advertisements.
The three Grieco dealerships voluntarily agreed to implement many of these changes after Neronha filed suit in 2022, though they “believe they have consistently complied with the highest ethical business standards,” according to the July 26 assurance of voluntary compliance document. Grieco did not agree to allegations of wrongdoing and said an advertising company it hired was responsible for ensuring its ads met regulations.
Grieco dealerships said consumers who didn’t want to buy a basic Zurich Shield product could have the cost deducted from their purchase price and that in most cases, the cost was disclosed on a supplemental window sticker on each vehicle. They also said consumers did receive express informed consent for the product and that pricing adjustments were disclosed in added window stickers.
The three stores are part of Grieco Automotive Group, which has other stores selling Acura, BMW, Chevrolet, Ford, Mazda, Mercedes-Benz and Nissan and also has locations in California, Florida and Massachusetts. Mike Grieco Jr., CEO, was a 2013 Automotive News 40 under 40 honoree.
This agreement is part of Neronha’s work to protect retail automotive consumers from unfair and deceptive trade practices such as junk fees and unwanted add-on products, his office said. It said Neronha is working to stop dealerships from refusing to honor car prices listed on dealership websites and window stickers.
