Last May, Joy Capps walked into a Spartanburg dealership with the plan of trading in her three-year-old car for a new one.
Today, she owes nearly $50,000 on two new cars and has significantly tarnished her credit history.
And she doesn't even own a car anymore.
The Saluda, N.C., woman is one of several area residents who say they were lured by the aggressive advertising campaign of Joe Gibson Suzuki. The complaints from Capps and others have led a Columbia attorney to start the process of filing a lawsuit, and have caused the Better Business Bureau to take the rare step of revoking the dealership's membership from its Upstate chapter.
Officials with the South Carolina Department of Consumer Affairs said last week that they had received 11 complaints about the dealership in the previous week alone.
Dealership owner Joe Gibson says the number of complaints is negligible compared to the number of satisfied customers and is a by-product of the tremendous growth and success of his business, which went from selling 200 vehicles in 2006 to selling nearly 1,500 in 2007.
Joe Gibson Suzuki is consistently one of the top three dealerships in the United States in sales and was the leading Suzuki dealership in the nation in sales for November. On Thursday, top executives from Suzuki visited the Spartanburg dealership to show their support and praise the local sales efforts.
New car for life'
It's hard to miss the television commercials for the dealership, which is on West Main Street in Spartanburg.
They run frequently and tout deals that would make any potential car buyer take notice. One set of ads offers the possibility of owning a new car for $47 a month thanks to a test program that provides free gas if the driver keeps track of his gas consumption. In that spot, "EPA" flashes on the screen, several times, seemingly referring to the Environmental Protection Agency. Other spots offer the opportunity to drive a "New car for life."
Better Business Bureau Upstate President Kathy Barrett said the decision to revoke Gibson's membership stemmed from two issues: The BBB could not get the dealership to consistently address and reconcile customer complaints, and the group's Advertising Review Board (a 23-member local panel) determined that Gibson's commercials were misleading and dishonest.
"We have unanswered and unresolved complaints," Barrett said.
She said that in the last three years, 29 grievances have been filed against Gibson that are related to how the business has dealt with customers. Most of them - 22 of the 29 - have been resolved by the dealer to the customer's satisfaction or the dealer has made a good-faith effort to do so, according to the BBB.
"We have closed 22 of these files in some form or fashion," Barrett said, "but in seven cases, we have either not been able to get the dealership to respond to complaints at all or not been able to get the dealership to fix the problem."
Dealership general manager Billy Mills said the dealership was unaware of its expulsion from the BBB because the company's controller died last fall. Mills said the dealership has contacted the BBB and has begun working to address the complaints, which Barrett confirmed.
"I'm glad they want to fix the problems, and I hope they do," Barrett said. "I guess we'll see what happens with the complaints and the advertising. Only time will tell if they are sincere or not."
Joe Gibson Suzuki is the third local auto dealer in the 10-county Upstate region of the BBB to have its membership stripped in the last three years. The others were in Greenville and in Belton.
"We received complaints from dozens upon dozens of consumers - those who have called us and those who have sent letters - stating that the commercials are misleading, so we took a hard look," Barrett said. "We taped Joe Gibson commercials on a VCR and replayed them over and over again, trying to see if there was any way a viewer could comprehend the offers and disclaimers, but there wasn't."
"The Federal Trade Commission says they must be legible and readable, and they weren't," Barrett said.
The Federal Trade Commission regulates car ads and has instituted rules forcing auto advertisers to improve how they disclose details of their sales. The rules say disclaimers must be "clear and conspicuous" and "reasonably understandable."
South Carolina does not have specific laws regarding advertising practices by auto dealers, unlike most states, which do have some requirements.
Columbia attorney Rodney Pillsbury says Joe Gibson's commercials and promises are "unfair trade practices" and are illegal.
"It's a situation where they are clearly making an advertising representation they have no intention of following through on," Pillsbury said, adding that the Gibson customers he has talked to were attracted by the ad that said they could get a car for $47 a month if they were willing to monitor their gas mileage.
"They had no idea the payments would go up," Pillsbury added.
An EPA spokeswoman said the agency has no program that rewards drivers for monitoring their gas usage.
However, dealership officials said their ads are meant to draw in customers who may not be familiar with Suzukis.
"What we're trying to let people know is that Suzukis are a really great product, made in Japan, that they might not know that much about," said Mills, who has worked in other Suzuki dealerships before coming to Spartanburg. He said that the dealership has many affordable introductory programs to get people low initial payments, and he said they are hearing feedback that they are "making a lot of customers happy."
Gibson, the owner, said he is not opposed to voiding contracts of unsatisfied buyers when absolutely necessary and reasonable.
"What if I told you that I had a file full of deals I've unwound?" Gibson said.
Gibson and his managers say the process for car buyers is clear, all details are disclosed, and sales representatives don't make any promises to customers other than the ones in the contract.
'They laughed at me'
Joy Capps, 61, says her experience has been a nightmare. And that's from a woman who has also had two strokes and two heart attacks.
"In May of 2007, I went to Joe Gibson and traded in my 2005 Forenza for a 2007 Grand Vitara," Capps said. "I signed a contract to pay $500 a month, but I was supposed to pay half and Joe Gibson was supposed to pay half. My son kept saying it was crazy, that the deal didn't make any sense, but I went along with it."
After a few months, Capps said she started getting letters from the lender saying Gibson's half wasn't getting paid. In December, she said she started calling the dealership looking for answers, but no one would talk to her.
She went back to the dealership, and after seven hours of arguing, they told her they would put her in a 2008 Grand Vitara for $159 a month. Confused, she says she agreed, signed the papers, and went to give them the keys to her 2007 Grand Vitara.
"They laughed at me," Capps said. "They said, 'Oh, no, you own both now. We didn't agree to take the old one in trade.' "
Capps drove the newer car home, but the next morning she went back and demanded they take her tags off the 2008, put them back on the 2007, and undo the deal. Capps said they would not, and after hours of arguing, she took a screwdriver she had brought with her, got down on her knees in the parking lot and transferred the plates back herself.
"They stood around me smoking and laughing while I did it, just picking on me and making me feel stupid," Capps said.
She went home in the 2007 Grand Vitara, called her lender and told them to come and repossess it, that she could not pay for it.
Another lending company continues to demand payment for the 2008 Grand Vitara, she says, even though she does not have it and only possessed it for about 12 hours.
She figures she owes between $30,000 to $50,000 on the two cars. To get around, she borrows one of her son's vehicles.
Joe Gibson Sales Manager Rich Harward offered a different version of the transaction. He said that when Capps came to him and bought the 2008 vehicle, she told him the 2007 version was about to be repossessed and she needed a car to drive. "What would you do if this woman came to you needing a car?" he asked.
Harward said his concern was working with Capps so that she would have a vehicle to drive.
Joe Gibson said the dealership prides itself on working with people who have had financial difficulties and can rebuild their credit by making regular car payments. The result, he said, is often a more financially stable consumer who can then qualify for better deals with lower interest rates, which helps improve their credit.
Owing, not owning
The Lasters of Woodruff said they were also attracted by the TV ads.
Joyce Laster said the Joe Gibson salesman told her that her income and credit weren't sufficient for her to qualify for a special promotion.
"They asked me what I could put down, and I said I wasn't prepared to do that," Joyce said. "They asked me what I could pay a month, and I told them $200, thinking they would say no and I could just get out of there."
She is 59 years old and collects a small monthly disability check. Her husband Larry is 65 and retired.
And the couple found themselves with a 2008 Suzuki Grand Vitara in the driveway and a contract that lists the price at $27,181, about $6,000 more than the national average price for that kind of car. In fact, the Lasters owed a total of $38,612 over the next 72 months, or $536 a month for six years.
Joyce Laster said that to address the high sales price, the dealership said they would receive a check from Joe Gibson Suzuki for $5,716. They showed a Herald-Journal reporter a copy of an IOU that said Gibson owed them that check.
"Then they said we could just trade it in after the 18 months, or refinance and maybe even pay less," Joyce Laster said, "but they wouldn't put it in writing."
If they made their payments for 18 months, they will still owe $21,316, according to documents the Lasters provided.
The Kelley Blue Book says the average 18-month-old Grand Vitara trades in for $10,960, meaning the couple would owe about $10,000 more than the car is worth if they tried to trade it in 18 months.
The Lasters test-drove their Suzuki on Feb. 14, bought it the next day, and by the time they got home, thought they had made a mistake. They phoned the lender in the transaction.
"I called them and told them not to do this deal, to cancel it, that there was absolutely no way I could make the payments," Joyce said, but she could get no one to say the deal would be undone.
Larry Laster says he took the vehicle back to the lot the next morning and after a protracted argument with Gibson staffers, simply dropped the keys on a desk, left the car there and rode with a family member back to the couple's Woodruff residence.
A few minutes after he got home, he said a Joe Gibson staffer pulled up, driving the silver Grand Vitara.
"He just left it in the driveway, got in a car driven by another guy, and off they went. And he smoked a cigar in it, so it stinks," Larry Laster said.
Until Monday, the vehicle was still sitting in the driveway in the exact spot where the dealership employee left it, with 153 miles on it. The couple say didn't want to drive it, didn't want to own it, and didn't know what to do about it.
But then, 10 days after they bought the car and five days after the Herald-Journal began asking the car dealership questions, the Lasters got a phone call.
Joyce Laster said an employee at Joe Gibson Suzuki called the couple last Monday morning and said they could return the car and would not owe anything. They did so Monday afternoon, and Joyce Laster said she now has a paper from the dealership signaling the deal has been undone and it is as if it never happened.
Harward said the dealership agreed to unwind the deal because the Lasters had "calmed down," but the Lasters had sent an enraged fax promising to print up the story of their dealings with the dealership and circulate it everywhere. He faulted the couple for agreeing to a deal without getting a contract spelling out what they believed an agreement on a future trade-in would be, and said no such promises are ever made by the dealership.
"Who would sign a deal where the promises weren't all in writing?" Harward said. "Why would they?"
Molly Crabill, a spokeswoman for American Suzuki Motor Corp., referred a reporter's inquiries to the manufacturer's public relations department, which also did not respond to the questions raised.
As for why the deal had been undone and how it had come about, Joe Gibson said, "The one thing we know is that long term our most important asset is people, customers and employees. For 70 employees, this is their livelihood. Salespeople are not good detail people. Is it possible some things get ignored? Yes. Are they malicious? No."
The fine print
Pillsbury, the attorney, said he has heard from dozens of people with similar stories of how they were attracted by the possibility of a great deal at Joe Gibson Suzuki and wound up with long-term loans and confusing financial terms. He said he is pulling together details of different people's cases - including the Lasters - and plans to file a lawsuit soon.
The Stameys of Hendersonville, N.C., could have been included in that group, but they stopped short of actually completing their transaction.
According to Amy Stamey, 45, an events planner, she and her husband Vervin, 55, who is retired, drove to Joe Gibson Suzuki after seeing the TV ads.
She said they were told the payments would appear to be $713 per month for 72 months (after the first three months free), but they would only have to put in $50 of each payment. A check from the dealer sent to the Stameys for $6,000 would cover the balance of the payments for nine months, and at the end of that time, they were told they could just return and do the same kind of deal all over again, thanks to "rebates and incentives."
But Amy Stamey said the dealership wouldn't put any of that in writing, and when she read over the paperwork, she realized they were being charged more than $41,000 for the XL7 SUV they were looking at and agreeing to repay $51,336 over six years, thanks to an interest rate of 10.49 percent.
According to the Kelley Blue Book, a well-equipped 2008 XL7 sells for an average of only $29,254 nationally.
"At the end of that first year, we still would have owed almost $40,000 on a car that probably would have been worth $20,000, and they wouldn't put any of their promises about trading it in writing."
One year in, documents indicated the couple would have owed $19,716 more than the car was worth, and Amy Stamey was beginning to panic because her husband was still starry-eyed for the deal.
"I made him call our attorney from the office, and our attorney told us to get out of there as fast as we could," she said. "He still wouldn't leave, and I was so desperate to get him out of there that I told him if he didn't leave with me, if he bought that car, I was divorcing him."
"He was furious then, but now he's glad."
Since then, Amy Stamey has been aggressively publicizing her experience by posting it on various consumer-advocacy Web sites.
Gibson sales manager Harward said it was actually dealership employees who encouraged the couple to call a lawyer, and then walk away from the deal, because they disagreed about it so bitterly.
"I'm not trying to cause a divorce here," Harward said.
A done deal
With many big-ticket purchases, you can often return to the store within a few days and back out of the deal. That's not the case with auto sales, where state law does not provide any such period to reconsider a purchase of a new car.
According to state law, a car buyer is obligated to all payments related to a car purchase the moment the sale agreement is signed.
Yet as many car buyers know, not every sale ends well. Nationally, banks are reporting a record number of auto repossessions this year - an indication both of the lagging economy and the attractive-sounding car loans that are being aggressively touted by dealers.
Barrett, the BBB official, said the dealership's actions warranted the extreme move of membership revocation.
Of the 1,200 member businesses in the Upstate, only five or six have been revoked in the past year. Nearly every major new car dealer is a BBB member, including 11 in Spartanburg.
"I can give you a dozen people to talk to who are willing to have their names be in the paper right now, more if it would help stop this, because they are so upset at the fact that it is continuing," Barrett said. "What they are claiming, what they are doing is just so unbelievable."
Joe Gibson said he runs a customer-oriented business that attracts people who are looking for great deals on cars. He said that while there may have been times salespeople didn't listen to customers as well as they should have, "Sometimes the customers have selective hearing, too, you know."
"These guys beat their brains out trying to get these people a car," Gibson said. "Some of these customers have never seen a new car, and our employees are working with them every way they can to get them into a great vehicle with a 7-year/100,000 miles warranty."
See GoUpstate.com for a list of car-buying tips from the Federal Trade Commission.
Spartanburg, NC - Lane Filler - GoUpstate.com article
Labels: consumer car dealer complaint, used car rip offs
