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CA Attorney General Sues Major Car Dealer For Fraud, Unlawful Practices

California Attorney General Xavier Becerra hosted a news conference on Monday morning to announce legal action against an automotive dealership operating throughout California and its chief executive for unlawful business practices affecting perhaps tens-of-thousands of consumers statewide, though he added that at the end of the day they don't know exactly how many people may be involved. The investigation of Paul Blanco's Good Car Company reportedly took place over a two year period.

The practices in question include false advertising regarding credit and discount programs, making false statements on credit applications, and deceiving customers regarding add-on products and additional charges, according to Becerra. The company operates a network of seven dealership locations in California, including three dealerships in Sacramento, and the company sells primarily used vehicles.

The lawsuit charges Paul Blanco with making false statements on credit applications and intentionally deceiving lenders about the value of vehicles and the consumer's ability to make loan payments. That allegedly allowed the company to increase profits while increasing the likelihood that consumers would be end up with loans they could not afford.

"A car is one of the largest, and most important purchases for many families, allowing people to get to work, school, and connect to their communities," said Attorney General Becerra. "Far from a good car company, Paul Blanco’s abhorrent conduct put vulnerable families at risk, through deceitful advertising and illegal sales and lending practices. It’s disgraceful and it’s unlawful. Working families make every dollar count. Today's action is about protecting our families from deception and unlawful practices that swindle these dollars away, leading to unaffordable debt."

In the suit Becerra contends that Paul Blanco also tricked customers into paying thousands of dollars for extra add-on products, like service contracts and optional insurance meant to help pay off an auto loan if the customer's car was totaled or stolen and they owed more than the car's depreciated value. California Department of Justice investigators claim sales representatives were instructed to cover with their hands parts of sales contracts detailing those add-ons and instructed to tell customers that the charges were required by law if asked about them. Paul Blanco employees who took issue with the company's policies were instructed to not to snitch, according Becerra.

The company is also alleged to have run ran numerous false and deceptive advertising campaigns on television, radio, and on the internet to lure consumers into their dealerships.

Paul Blanco’s Good Car Company responded to the lawsuit with a vow to fight the allegations, according to Business Wire.

"Our family-run business has helped hard-working Californians who cannot afford or don’t have the credit score necessary to buy a car at other dealerships do so," said Putu Blanco, CFO of the company and wife of Paul Blanco. "Paul Blanco’s Good Car Company has rigorous controls and a culture of compliance in place to ensure California regulations are followed and consumers are protected. We will fight this misguided action vigorously to demonstrate to the Attorney General and his lawyers that our customers and California consumers come first."

She claims the company has an outstanding record of operation and has thousands of satisfied customers in California and Nevada.

"It’s unfortunate that the Attorney General’s office felt compelled to file a complaint against our company today,” added Blanco. “We will continue to provide much-needed services to Californians without a great credit score but who must have transportation to live, work and raise a family, and look forward to our day in court."


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