State Complaint Will Cost Car Dealer Almost $400,000

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

Part of the settlement money will go toward developing consumer-education programs to educate the public about improper sales tactics, said Attorney General Christine Gregoire at a news conference yesterday.

The settlement, stemming from complaints of unlawful sales tactics by Thomason, is the largest of its kind in the state, Gregoire said.

In the agreement filed in King County Superior Court, Thomason did not concede any of the allegations probed during a two-year investigation, Gregoire said.

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

The company also agreed to mediation with consumers who have complaints against its dealerships. Settlements with those motorists could reach a total of $100,000, 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 complaints, was attracted by a print advertisement 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 had advertised vehicles at bargain prices while having almost none available at that price in an attempt to switch customers to higher-priced vehicles. 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."

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

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

"(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 highest-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, his company has become the largest car dealership in the state.

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.

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