A government watchdog agency is alleging that Bill Heard Enterprises has participated in deceptive and misleading business practices including falsifying documents to lenders and charging Georgia customers for parts not installed on the cars.
The company, through an Atlanta public relations person, denied all the allegations by the Governor's Office of Consumer Affairs filed in Fulton County Friday.
The court filing stems from two lawsuits filed in the Atlanta court last year.
Bill Heard Enterprises, which has five Georgia dealerships including the flagship store in Columbus, filed a lawsuit against the Office of Consumer Affairs in May 2007 under the Georgia Open Records Act seeking the names of individuals and dealerships who had filed complaints against Bill Heard. The state then filed a countersuit in July 2007 claiming the company had used misleading advertising resembling a vehicle recall notice. That flier violated the Georgia Fair Business Practices Act of 1975, according to the state.
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Friday's filing comes as Bill Heard Enterprises is battling a significant financial issues. GMAC has discontinued credit for new car inventory to some of the company's 14 dealerships spread from Arizona to Florida, the company confirmed to the Ledger-Enquirer on Monday. The company has declined to say which or how many of the dealerships are affected by the GMAC decision.
Bill Heard's Georgia dealerships remain open and are conducting business.
The company has been working to secure credit for new-car inventory since late last week.
The lawsuit by the Office of Consumer Affairs is a separate matter from the company's financial issues.
Last week, attorneys in the Office of Consumer Affairs believed they were close to reaching a settlement with Bill Heard Enterprises that would include penalties, fines and an injunction barring questionable business practices in the future, Consumer Affairs Director of Administration and External Affairs William D. Cloud said Wednesday. It was the second time the parties were near a settlement in the more than two-year investigation, Cloud said.
"Two years ago, we had an agreement and they walked away from it," Cloud said. "We had another agreement and they walked away in the last few days."
The company's response came from Alan Ulman, an independent public relations person who has worked with Bill Heard Enterprises in the past, Wednesday afternoon.
"We have consistently stated that we have policies and procedures in place that require and enable legal, ethical and fair business practices including advertising and finance," the release stated. "We deny the allegations, will continue to work constructively with the Office of Consumer Affairs, and will address their specific questions directly with them."
The company said it has been successful because of repeat business.
"Bill Heard Enterprises is among the most successful businesses of its kind in the industry, the country, and the State of Georgia. Over our more than four decades in business our customer base has historically grown, been overwhelmingly loyal and satisfied, and has returned to do repeat business with us in large numbers," the Heard Enterprises statement read.
On March 6, Fulton County Superior Court Judge Marvin Arrington ruled in favor of Bill Heard Enterprises, which was represented by former Georgia Attorney General Mike Bowers and former Gov. Roy Barnes, in the original Open Records Act suit. The Office of Consumer Affairs has appealed the order to release the names of those filing the complaints against Bill Heard Enterprises.
No ruling on the appeal has been issued.
The Office of Consumer Affairs has been investigating Bill Heard Enterprises since 2003, Cloud said.
"We had an open records request from Bill Heard on April 5, 2007 that asked for the number of complaints against Bill Heard versus that of five other dealerships that he named," Cloud said. "This was from July 1, 2005 through April 5 2007. Heard had 113 complaints during that time period versus a total of 10 complaints against the five other dealerships."
The five dealerships Heard mentioned in the Open Records request were Carl Gregory of Columbus, Troncalli Nissan of Decatur, Milton Martin Chevrolet of Gainesville, Hardy Chevrolet of Gainesville and Hamby Chevrolet of Macon, Cloud said.
The Office of Consume Affairs has asked the court for a jury trial, and to award civil penalties of up to $5,000 per violation and to award the state attorney fees.
The state's first complaint centered on a pattern of misleading and deceptive advertising practices it claimed the company was responsible for.
The new allegations accuse Bill Heard Enterprises of questionable business practices. Those include:
-- Bill Heard Chevrolet in Union City, just south of Atlanta, failed to pay off loans on trade-ins, leaving the consumer responsible for the bank note on both vehicles, according to court documents.
"Bill Heard Enterprises and Union City have repeatedly mislead (misspelling in original) consumers into believing their trade-in would be part of a purchase transaction of a new automobile, when in fact the consumers' trade-in was not included," according to court documents. "Specifically, Bill Heard Enterprises and Union City have falsely stated to consumers that they would pay off the balance owed on their trade-in vehicle."
The practice has caused consumers "to incur tens of thousands of dollars in deficiency balances, and has negatively impacted consumers' credit," according to court documents.
-- The Town Center dealership in Kennesaw engaged in a practice referred to as "power booking," according to court documents.
"They have made representations to potential third-party automobile financiers that certain options and extra features such as leather seating, sunroofs, power locks, etc. have been added to an automobile the dealership is attempting to get financed on behalf of consumers," the complaint states. "This deception was engaged in in an effort to misrepresent the automobiles' 'value' to third party lenders for purposes of securing financing, when in fact these options and extra features have not been added."
The company instructed its dealers to advise consumers to "perpetuate this misrepresentation and verify the existence of these fictitious added features, if subsequently contacted by their vehicle lender," according to court documents.
An unnamed Bill Heard salesman is quoted in the court documents saying:
"And see the banks verify this equipment and everything so you have to prep the buyer that when the bank calls, you know, whatever the bank asks you, you tell them yes, it's got that equipment. If its (misspelling in original) got a hot tub in it, you got to tell them its got a hot tub in it."
-- The Town Center dealership instructed salesmen to charge consumers for the installation of a "Clifford" ignition interrupter when, in fact, no such equipment was installed on their vehicle, according to court documents. The interrupter is an anti-theft device that the consumer would not know was there unless they tried to "hot wire" the car without a key.
-- "Bill Heard Enterprises and Bill Heard Chevrolet Columbus have forged consumers' signatures on agreements without their knowledge and permission," according to court documents.
One incident was reported to Columbus Police, who reported it to the Governor's Office of Consumer Affairs, according to court documents. The date of the complaint and who filed are not mentioned in the suit.
"Only when the Governor's Office of Consumer Affairs initiated an investigation and informed Heard that OCA was planning on requesting the Georgia Bureau of Investigation to do the same did Bill Heard Chevrolet Columbus provide relief to the consumer whose signature had been forged," according to court documents.
-- An Office of Consumer Affairs undercover investigator contacted an "auto loan approval hotline" in one of Bill Heard's Spanish language advertisements, according to court documents.
"Notwithstanding the fact that the undercover investigator entered fictitious identifying information and fictitious address, the investigator was advised by the automated Spanish language recording:
"Congratulations! You're approved for an auto loan up to 40,000 dollars to finance the purchase of an automobile. Write down this amount on your notice. Go directly to the authorized dealer to validate this pre-approval and select your vehicle before your credit line expires. Thank you using the loan approval hotline. Good-bye."
In its claim, the state points out that Heard's business practices have drawn scrutiny from other sources.
"The various activities and practices described herein have not only caused the Governor's Office of Consumer of Affairs to have to amend its counterclaim, but also caused the Atlanta Better Business Bureau to revoke the accreditation of Bill Heard's Atlanta dealerships on June 12, 2008," according to court documents.
There have been similar complaints about the company's business practices in Tennessee, Arizona and Florida, according to published reports.
Bill Heard Enterprises is one of the nation's largest Chevrolet dealers. The company's statement Wednesday stated the financial troubles the company is experiencing is a sign of the difficult economic times.
"We are taking actions to address the decision made by GMAC," the Heard Enterprises release stated. "We have been successful in this business for four decades, and we have navigated successfully through challenging economic conditions before. Our plan is to increase our efficiency and productivity, tap the emerging fuel-conscious market with an appropriate product mix, reduce our already competitive cost structure and restructure our business to compete effectively in current market conditions."