Rosenthal Dealers Make Refunds On Lease Contracts

Header--Montgomery County, Maryland. Press Releases

St/rosenthal.pr 00-284

Contact: Sue Rogan, 240-777-3722 or
George Rose, 240-777-3678

For Immediate Release: July 25, 2000

ROSENTHAL DEALERS MAKE
REFUNDS ON LEASE CONTRACTS

The Montgomery County Department of Housing and Community Affairs announced today that as a result of an investigation by its Division of Consumer Affairs (DCA), two Rosenthal automobile dealers will pay more than $26,000 to settle a complaint about the car dealer's leasing practices.

"Our Consumer Affairs division is to be commended for its investigation, and for diligently enforcing our consumer protection laws and uncovering deceptive trade practices," said County Executive Douglas M. Duncan. "We do not tolerate unfair business practices in Montgomery County."

DCA alleged that Rosenthal Nissan-Gaithersburg, located at 619 N. Frederick Avenue, and Gaithersburg Mazda-Isuzu, located at 625 N. Frederick Avenue, had charged consumers who were leasing vehicles a "resellers" fee when they tried to purchase the vehicle at the end of the lease term. Under standard new vehicle leases, consumers are entitled to purchase the vehicle at the end of the lease by paying the "purchase option price" stated in the lease contract. DCA investigator Sharon Wilder determined that under the lease contract, the two dealers had no legal right to charge a "resellers" fee. Wilder said the "resellers" fee was charged on lease cars that were purchased from 1997 to May 1999, when DCA began its investigation. Rosenthal stopped charging the fee after being contacted by DCA.

Wilder said that the dealers will provide refunds totaling $21,905 to forty-seven different consumers. The refunds range from $395 to $495, with most consumers receiving a refund of $495. The agreement requires the dealers to sell future lease vehicles for the "purchase option price" and not add any additional charges unless they are specifically provided for in the lease agreement. The dealers will pay $5,000 to DCA's consumer education fund within 15 days and will pay an additional $5,000 to the fund if any new complaints are filed against the dealers during the next six months. The agreement does not constitute an admission by Rosenthal of any violation of law.

"As the price of automobiles continue to rise, many consumers who normally buy cars are considering leasing for the first time, since they can usually get more car for a smaller down payment with a lease," said DCA Division Chief George Rose in announcing the agreement. "Consumers should know and understand the pros and cons of both types of transactions before signing on the dotted line."

Rose advised consumers with questions to call DCA at 240-777-3636 for advice before signing a lease or purchase agreement.

# # #

News Releases | News