Lawsuits are piling up against Chad Franklin Suzuki. The Missouri and Kansas attorneys general are suing. And consumers are taking action with two class action lawsuits. But, some wonder if the dealer broke the law. We have new insight into the case and the deals themselves. Our investigation continues because consumers are desperate for help. Their payments are skyrocketing to $500 and $600 a month. The attorneys general promise help soon, but a former FBI agent is raising new questions about whether Franklin's dealerships broke federal laws. This case involves three states, two car dealers, and one promotion. "The ads certainly are another piece of that con man profile," former FBI investigator Charles Stephenson said. They are ads Kansas officials call deceptive. They aired thousands of times, and got hundreds to sign up. "Instead of robbing you with a gun they robbed you with a pen," Stephenson said. The deal that was supposed to cost next to nothing is costing consumers everything. "I heard a knock at the door. She said we come to repossess your car," Bill Lantz said. "I could probably have a Porsche with the payments and amount that is owed on that car," Adam Simmons said. But, Simmons' Porsche-sized payments are for a Suzuki. He contends it's never been worth what he owes on it.
The special deal, of no or low monthly fees, meant no haggling. Buyers pay the sticker price along with special fees for a special deal. There's the Kansas City Market Adjustment of $1,490. Gap insurance often ran about $600. Plus, there's the extended warranty that cost Simmons $2,300. There is question as to why Simmons even needed an extended warranty. The Suzuki comes with a standard 100,000 mile warranty. Plus, the buyers only keep the car for up to a year. When buyers walk out of the dealership, their loan is worth more than the car. The Kansas attorney general's lawsuit says all these extras make the deal one-sided in favor of Chad Franklin Suzuki. But the dealership convinces buyers the deal will work. Armed with a hidden camera, this is the explanation from the dealership's finance manager. "If the market bore that it was a straight across trade minus or plus your loyalty factory rebates and cancellations from ancillary products like warranty and gap; that would negate or cancel out the inequity in your trade in," the Finance Manager said. So, Simmons followed the dealership's advice and disregarded the loan obligations. He relied on what two attorneys general call misleading statements. The Missouri attorney general alleges consumers were told that when their rebate checks run out, they just bring in the car, get a new one, and a new round of rebate checks. But Simmons' suspicions grew when he traded his first Franklin car for another. "I was kind of surprised by the negative equity that accumulated," Simmons said.
Simmons carried more than $6,700 from his first car to his second one. It is a responsibility Simmons and other customers did not expect to absorb. The Missouri attorney general says the dealer misrepresented that responsibility. The deal stopped with no notice, and the dealer blamed the economy and credit restrictions. "I had to take money out of my 403-B because I was upside down," Patience O'Hara said. Other customers had their car repossessed. "It ruined my credit," Linda Davis said. The Kansas attorney general says consumers were ignorant to the details because false representations were made in the ads and by employees. The suit alleges the dealership took advantage of that ignorance. "In this case it sounds to me like they were just churning monies. They were making a lot of money," Stephenson said. Stephenson is a 13 year veteran of the FBI who investigated organized and white collar crime. Now, he tracks fraud cases for his security businesses. "Unfortunately these guys make their money; they're gone. The consumers are in debt with a civil suit and a bad credit rating, and sometimes these guys get away with nothing," Stephenson said.
The civil suits are piling up for Franklin's businesses. The Missouri dealership closed, and there's a skeleton crew at the Kansas City, Kan., store. Consumers can not walk away from their deals as easily. They have repo men showing up at their doorstep, debt collectors calling, and a shaky financial future. They say they took advantage of a deal and a promise aired over and over, more than 9,000 times. "This ad being played over and over that just amplifies that conspiratorial intent that they were doing to draw people into this fraudulent scheme," Stephenson said. Franklin won't comment on our investigation. But, denies many of these allegations in court filings. And he even challenges the authority of the Kansas attorney general and wants the case moved to Federal Court. So, this is just the beginning of a long legal battle, over whether this is a Federal or State issue. The former FBI agent we talked to says this is probably a case for the Feds, since the ads also aired in South Carolina. Typically, the FBI does not comment on investigations.
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