California Attorney General Xavier Becerra recently filed a lawsuit in the Alameda County Superior Court against Paul Blanco’s Good Car Company, a network of motor vehicle dealerships, and its chief executive Paul Blanco, alleging that the company engaged in a variety of unlawful business practices.
These practices allegedly include false advertising regarding credit and discount programs, making false statements on credit applications, and deceiving customers regarding add-on products and additional charges, Becerra said.
The company operates a network of seven dealership locations in California (including an Inland Empire location in Norco) and mostly sells used vehicles.
Paul Blanco targets vulnerable predominantly low-income consumers with subprime credit, Becerra said. For many of these consumers, a vehicle is a necessity and can be the most expensive one-time purchase they ever make. Paul Blanco’s allegedly deceitful and unlawful conduct put these families at risk, Becerra said.
“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 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.”
The lawsuit charges Paul Blanco with making false statements on credit applications, including by deceiving lenders about the value of vehicles and the consumer’s ability to repay the loans. This allowed the company to boost its profits through improperly financed sales and increased the risk that the consumers would be saddled with loans that they could not afford.
Paul Blanco also allegedly tricked customers into paying thousands of dollars for extra add-on products, such as service contracts and GAP insurance, by telling customers that these add-ons were required by law, or by simply concealing the extra charge. These practices increased the cost of an already substantial purchase, almost always made by taking out an expensive loan.
The company also allegedly ran numerous false and deceptive advertising campaigns on television, radio and the Internet promising falsely low interest rates even for consumers who wouldn’t normally qualify for such rates to lure unsuspecting consumers to the dealership, Becerra said.