State's Biggest Car Dealer To Pay $285,000 Penalty -- Attorney General's Probe Finds Deceptive Tactics

After a two-year investigation by the state attorney general, Thomason Auto Group, Washington's largest auto dealership, has agreed to pay nearly $400,000 to settle a consumer-protection lawsuit with the state.

The settlement, stemming from complaints of unlawful sales tactics by Thomason, is the largest of its kind in the state, Attorney General Christine Gregoire said at a news conference today.

The Portland, Ore.-based car dealer agreed to pay a civil penalty of $285,000. Another $100,000 will be suspended on condition that the company stops its past practices, Gregoire said.

"Our investigations revealed that when some well-intentioned Washington consumers walked into Thomason dealerships, they were confronted with deceptive, high-pressure sales tactics and bait-and-switch scams," Gregoire said. "We believe it was (the company's) intention to lure people through the door and sell them what was not advertised."

Diane Williams of Seattle, one of 70 consumers who filed a complaint, was attracted to a print advertising featuring a 1992 Ford Mustang LX offered at $7,888. She bought the car and discovered that her total bill was $21,101.

Gregoire also said the company would advertise vehicles at bargain prices and then have almost none available at that price, trying to switch customers to higher-priced vehicles instead. The company misled consumers about interest rates and persuaded some motorists to lease, rather than buy, costing them as much as $12,000 extra, she said.

"I think this settlement will have a substantial effect on the industry," said Douglas Walsh of the Attorney General's Consumer Protection Division. "As for Thomason, I don't think he wants to be known as a dishonest dealer. He will change his practices."

Thomason denies wrongdoing

Company President Scott L. Thomason did not admit to any of the allegations filed today in the agreement in King County Superior Court.

"We don't agree with the complaint," Thomason said yesterday.

"(Settling) was a business decision . . . I have better things to do than fight with the state of Washington in court. It was a no-win situation."

Thomason's 11 auto dealerships, two in Kirkland, one in Bellevue and eight in Oregon, make him the largest volume dealer in the Northwest. In 1993, he did $380,013,638 in sales - more than $1 million a day.

Since opening his first dealership in Washington in 1991, he has become the largest car dealership in the state, selling 11,000 cars.

Restitution is available

Consumers who feel they were victimized by improper practices have 90 days to contact the state attorney general's office at (800) 551-4636.

The company has also agreed to state-supervised "good-faith" talks with past car shoppers. Restitution from the dealer to customers may come in the form of $300 checks, and settlements may total $200,000, Walsh said.

The second-largest consumer-protection settlement involving a car dealer was made in 1986, when Cal Worthington Ford in Federal Way agreed to pay $50,000 in penalties to the state.

Much of the money received in the Thomason settlement will be used to develop a consumer-education program, including a pamphlet on how to buy and lease a car.

Information from Times staff reporter Karen Alexander and from The Associated Press was included in this report.