NEWARK, N.J. -

The latest enforcement action against a dealership in New Jersey provided another reason why Dealertrack Technologies associate general counsel Randy Henrick recently acknowledged that when he brings up the topic of compliance, “many dealers feel a headache coming on.”

Before a Garden State superior court judge ordered an independent dealer to pay nearly $700,000 in penalties, Henrick began a recent company blog post by recognizing, “With so many laws, regulations and rules to contend with, it’s easy for dealers to feel frustrated and confused.

“The trouble is that non-compliance can lead to thousands of dollars in fines, class-action penalties and reputation damage,” he added.

RLMB, a dealership located in Ledgewood, N.J., sustained exactly what Henrick referenced since a judge ordered the store to pay $693,645.91 after finding that it violated the state’s consumer protection laws and regulations a total of 640 times, following legal action brought by the Attorney General’s Office and the State Division of Consumer Affairs.

The state’s 10-count complaint, filed this March in State Superior Court in Morris County, alleged that RLMB and its manager, Michael Bloom Sr., violated the Consumer Fraud Act, the Motor Vehicle Advertising Regulations, the Automotive Sales Regulations, the Used Car Lemon Law (UCLL) and UCLL regulations by, among other things, advertising used vehicles for sale without disclosing:

— To consumers the vehicle’s prior damage or prior use
— Selling vehicles “as is” when they qualified for a warranty
— Permitting third parties to advertise, offer for sale and/or sell used vehicles on Craigslist that were titled to RLMB.

Officials indicated the defendants failed to file a response to the complaint, resulting in Judge Stephan Hansbury entering a final judgment by default.

The judgment requires the defendants to pay $640,000 in civil penalties, $31,200.91 in reimbursement to the state for its legal and investigative costs and $22,445 in restitution to seven consumers.

By the terms of the final judgment by default, the dealership must comply with all applicable state laws and regulations in its business practices.

“The penalty ordered in this matter is appropriate and should send a clear message to all motor vehicle dealerships that violating our consumer protection laws and regulations comes at a steep price,” New Jersey acting attorney general John Hoffman said.

“We are continuing to review the practices of new and used motor vehicle dealers to ensure consumers are not taken advantage of,” Hoffman continued.

The state in its filed complaint alleged that RLMB:

— Failed to provide consumers with title and registration to used vehicles prior to the expiration of temporary title and/or registration.

— Required that consumers sign blank sales documents.

— Offered used vehicles for sale at the dealership location that did not have prominently displayed the Federal Trade Commission Used Car Buyers Guide, a document which, among other things, indicates whether such vehicle comes with a warranty.

— Offered for sale used vehicles that did not have the total selling price conspicuously posted.

— Advertised and/or offered for sale used motor vehicles through the RLMB website, without the required statement that “price(s) include(s) all costs to be paid by a consumer, except for licensing costs, registration fees and taxes.”

— Failed to itemize documentary service fees

— Since at least 2007, failed to pay the $.50 administrative fee for each used vehicle sold, as required by the UCLL and UCLL regulations.

“The evidence presented to the court by the Division of Consumer Affairs, resulted in a favorable decision for consumers,” New Jersey acting state director of consumer affairs Steve Lee said. “Dealerships must not withhold information from consumers that the dealerships are required by law to provide.”

To avoid the same fate this New Jersey store sustain, Henrick said in the blog post, “While enlisting the help of qualified legal counsel is the best approach, there are a number of proactive steps dealers should take to help guard against the threat of non-compliance.”

Henrick elaborated about three steps dealers can take in the post available here.