PROVIDENCE — The state attorney general on Tuesday announced he has sued two related car dealerships, accusing them of deceptive pricing practices.
Attorney General Peter F. Neronha said that Grieco Honda, of Johnston, refused to sell vehicles at the advertised prices, instead adding a $5,000 “addendum fee” to the price.
Neronha also said that Grieco Toyota, of East Providence, advertised “wholesale” prices, a term that is forbidden in car ads.
Neronha seeks to have customers reimbursed for the amount they overpaid, as well as fining the dealers up to $10,000 for each violation of the state’s Deceptive Trade Practices Act, fines that could total more than $1 million.
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Grieco Automotive Group CEO denies accusations
George Smith, chief operating officer of Grieco Automotive Group, the dealerships’ parent company, denied advertising Hondas at “false and misleading prices” and blamed the use of “wholesale” on a Florida advertising company that, he said, did not know it’s illegal in Rhode Island.
Smith said that the prices listed on the Honda dealership’s website were the manufacturer’s suggested retail price and not the price for which the car was offered. He said the prices were for “informational purposes only.”
Smith said dealers rarely sell cars at the suggested price; usually they sell for lower. But, in the current market, some cars are in such short supply and high demand that they go for more than the suggested price, he said.
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Smith said his lawyer, former Attorney General Jeff Pine, is working with Neronha’s office to ensure the company complies with the law.
Smith added that Honda requires the suggested retail price to be listed in ads and bars dealers from listing the discount or markup from that price.
Grieco Automotive Group traces its roots to the 1970s, when founder Michael Grieco Sr. started a collision-repair service. The company is now headed by his son, Michael Grieco Jr.
What the cases allege
The cases, which were filed Friday afternoon, say a customer went to Grieco Honda in December and was told that the car would cost $5,000 more than the “sticker price.”
The suit then details three visits to the dealership in January and March by investigators from the attorney general’s office, who said they also were told vehicles would actually cost $5,000 more than the advertised price.
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Ads for Grieco Toyota listed more than 100 cars on the “vehicle value” lot being sold at wholesale prices, the suit says.
Neronha said rules set by the Division of Motor Vehicles, which regulates car dealers, provide that “the word ‘wholesale’ shall not be used in retail motor vehicle advertising to imply that motor vehicles are being offered to the general public at
‘wholesale prices.’ ”
Neronha said his office is prepared to make sure that car dealers follow the rules.
This article originally appeared on The Providence Journal: East Providence, Johnston car dealers accused of deceptive pricing