State reaches settlement with Lithia Motors, Inc. on fees not Included in advertised price investigation

Alaska Attorney General Stephen Cox announced on December 29 that a settlement has been reached with five Lithia dealerships in Alaska following an investigation by the Department of Law’s Consumer Protection Unit into dealer fees and misleading advertising.

The settlement requires Lithia to make restitution to consumers, pay a civil penalty of $300,000, and regularly audit its advertisements to ensure that they comply with Alaska’s laws.

“There is no excuse for a dealership in Alaska to charge its customers dealer fees that aren’t included in its advertised prices,” said Attorney General Cox in a press release. “Not only is this explicitly illegal under Alaska law, but it is also fundamentally deceptive to advertise one price online and then charge a higher one at the dealership. That said, Lithia deserves credit: when our Consumer Protection Unit brought their concerns to their attention, Lithia took ownership of its mistakes, assisted in disclosing the extent of the problem, and worked cooperatively with our Consumer Protection Unit to establish a fair resolution.”

Under Alaska law, a dealer must include all dealer fees (such as “document fees”) in the advertised price for a vehicle. While only a relatively small proportion of Lithia’s sales failed to comply with the law, the Department’s investigation suggests that hundreds of consumers may have been charged fees illegally. Lithia has agreed to review its sales records back to Jan. 3, 2019, to identify and pay restitution to consumers who paid more than the advertised price for a car. Lithia is required to complete the process of identifying, notifying, and paying consumers within 270 days of the settlement’s approval by a judge of the Anchorage Superior Court.

Lithia has identified certain periods of time for which its dealerships do not possess sales records. People who bought a car during the following periods will have to take action to claim restitution:

--Lithia of Wasilla, LLC dba Lithia Chrysler Jeep Dodge Ram of Wasilla from Jan. 3, 2019, to March 31, 2021.

--Lithia of Anchorage, Inc. dba Lithia Chrysler Dodge Jeep Ram Fiat of Anchorage, aka Lithia Superstore South Anchorage, from Jan. 3, 2019, to Nov. 30, 2019.

--Lithia of South Central AK, Inc. dba Chevrolet of South Anchorage from Jan. 3, 2019, to Feb. 28, 2021.

To receive restitution, consumers who bought a vehicle during the periods described above must have the following:

--A signed and notarized affidavit by the consumer stating that the consumer personally viewed an advertisement for the vehicle they purchased, which stated a price less than the sum of the price and document fee reflected in the contract, minus any optional accessories and add-ons; and

--A copy of the consumer’s contract demonstrating that the consumer paid a document fee to a Lithia dealership listed above, during a time period listed above;

--A mailing address where a restitution check should be sent.

Please email the documents listed to consumerprotection@alaska.gov, alexandra.giza@stoel.com, and docfeeinquiry@lithia.com within 100 days of the Court’s approval of the settlement, which the State anticipates within the next several weeks.

Consumers who have questions about this settlement can contact the Alaska Department of Law’s Consumer Protection Unit at (907) 269-5200 or at consumerprotection@alaska.gov.