AG: Used car dealer to pay for deceptions

Agreement secures credit for 5,695 customer accounts

FAYETTEVILLE — A buy-here-pay-here car dealer engaged in deceptive trade practices to take advantage of customers, according to a news release from the state attorney general’s office.

A judge accepted an agreement Wednesday to resolve a consumer protection lawsuit filed by the attorney general in Washington County Circuit Court against Monte Johnston and Automatic Auto Finance, Jorja Trading and Cashfish Motor Pawn, all of which are in Springdale. Johnston owns the dealership, AAF and its related businesses.

Current and former customers of AAF may be eligible to receive a credit for money they owe. The agreement secures over $1.5 million in credit for more than 5,695 customer accounts and levies $3 million in suspended penalties against the defendants if they violate the judgment.

AAF and its affiliates are also required to pay $238,000 to the attorney general’s office for litigation costs.

A buy-here-pay-here car dealership is a business handling all financing, payments and debt collection for vehicle purchases directly through the dealership and its related companies.

The lawsuit alleged AAF and its affiliates engaged in deceptive advertising and sales of vehicles.

AAF and its affiliates denied they violated any Arkansas laws.

Under terms of the settlement, AAF is prohibited from doing business under multiple names. AAF is required to develop and use underwriting practices to ensure consumers aren’t trapped in a contract they have no reasonable way of repaying.

Customers will have the opportunity to have a possible purchase inspected by a third party to verify its road worthiness.

AAF is no longer allowed to conduct verbal sales pitches in Spanish or Marshallese and then require the buyer to sign a contract in English. The company will be required to produce a copy of the contract in the language of the verbal sales presentation to the buyer.

AAF also agreed to modify its vehicle servicing plans and practices as well as its irregular payment schedules. Other practices reformed under the agreement include procedures for repossession of vehicles after payment default, collection practices for customers who are in payment default, legal actions taken against defaulting customers and garnishment procedures.

AAF’s owner, Johnston, is banned for five years from operating a used motor vehicle company offering credit, financing or engages in collection of debt related to used motor vehicles or buy-here-pay-here businesses.