California AG Sues Paul Blanco’s “Good Car Company”
California’s attorney general sued Paul Blanco’s Good Car Company, a Northern California car dealer that heavily advertises on TV accusing it of false advertising and lying on loan documents to boost its profits at the expense of its low-income customers.
According to the Attorney General, “For many families, that name could not be farther from the truth.” In the 32-page complaint filed in Alameda County the dealer is accused of running a sophisticated scheme to lure customers into a dealership only to later lie about their incomes and the value of the cars they were purchasing to convince lenders to approve the loans.
The company paid for ads promising customers could get their credit checked over the phone. However, the calls went to call center operators who had detailed scripts telling customers to “please hold while I process your application,” only to return five seconds later to congratulate them on meeting the credit criteria for several lenders. An unnamed manager at the call center said operators would not process loan applications at all. Instead, the act was a ruse to collect information and generate sales leads.
Once customers arrived at the dealership, the company lied about how much money a potential borrower earned each year to deceive lenders. An audit by only one finance company found that of 320 incomes reported from the company’s location in Fresno, more than 78% of them were inflated by at least $500 per month.
The complaint alleges the dealer made lots of money selling optional add-ons, such as insurance or service contracts, by falsely telling customers they were required by law. In some cases, customers did not know they were purchasing add-ons because employees hid the paperwork by placing their hands over the disclosures — a technique employees at the dealership referred to as a “hands-down close.”
Senior management, including Paul Blanco, himself was in on it. The complaint said some employees who objected to the techniques were fired while others were warned not to be a “snitch.”