(INDIANAPOLIS) – Attorney General Curtis Hill announced today that four Indianapolis-based used-car dealerships have paid $100,000 total in restitution after the Office of the Attorney General alleged they violated Indiana consumer and motor vehicle laws.
In an amended complaint filed in July 2016, the office alleged that the dealerships – Circle City Auto Exchange, Inc.; Circle City Auto Connection Inc.; Circle City Sales & Service Inc.; and Empire Auto Group Limited – violated the Indiana Deceptive Consumer Sales Act and the Indiana Salvage Motor Vehicles Act. The dealerships were accused of selling more than 200 used motor vehicles without obtaining the proper title brands required after the dealerships purchased the vehicles at salvage auctions after major accidents.
These vehicles were declared “total loss” by their previous owners’ insurance companies, but they did not contain a title brand of “salvage” or “rebuilt.” In Indiana, when a vehicle is determined to be a “total loss” after an accident, the insurance company or owner must apply to the Indiana Bureau of Motor Vehicles (BMV) for a “salvage” title. For a “salvage” vehicle to be eligible to be operated on Indiana roads, the owner must then apply for a “rebuilt” title, provide certain documents to the BMV and submit the vehicles to a police inspection.
After purchasing the vehicles from the salvage auction, the dealerships would apply to the Indiana BMV for clean titles, according to the complaint. This clean title designation significantly affected the perceived value of the vehicles, resulting in consumers paying more than the vehicles were worth, Attorney General Hill said.
Additionally, the dealerships did not properly rebuild those vehicles for use on Indiana roads in accordance with state law, the complaint alleged. The dealerships also misrepresented the mechanical quality, safety and performance of the vehicles, while charging consumers excessive prices for them, according to the complaint.
Many consumers who purchased these vehicles from the dealerships experienced mechanical and safety issues soon after buying them, the complaint says.
“Any business or person that deceptively sells vehicles to Hoosier consumers will face consequences,” Attorney General Hill said. “Hoosiers deserve truthful information about the vehicles they are purchasing.”
A consent agreement in the case was approved in Marion County Superior Court. The court granted judgment against the dealerships for $100,000 in consumer restitution.
The money was paid to the Office of the Attorney General, which will distribute it to consumers who purchased vehicles from the dealerships and were harmed by the alleged violations of the dealerships. Consumers who purchased such vehicles can expect to receive a restitution claim form from the Office of the Attorney General in the coming weeks.
Empire Auto Group Limited is the only one of the four dealerships that is still in operation.
The amended complaint and the consent agreement are attached.