Jerry's auto dealers will reimburse buyers Some vehicles sold as new had been used or damaged

November 25, 1992|By Ellen James Martin | Ellen James Martin,Staff Writer

Some of the cars had been stolen and returned. Some were involved in serious accidents involving employees. And some were damaged as they were moved around the lots. But all 19 vehicles were sold as new by Jerry's Chevrolet and Jerry's Toyota.

Now, the two Baltimore County dealerships, both owned by Gerald J. Stautberg, have reached an agreement with the state's Motor Vehicle Administration to pay $70,000 in restitution to the 19 customers who were not told that these "new" vehicles had been damaged or stolen.

This is not the first time that one of Mr. Stautberg's dealerships has been cited for this problem. Two years ago, Maryland's Consumer Protection Division reached a settlement with Jerry's

Mitsubishi in Baltimore County involving similar allegations.

"I don't know how prevalent the practice is," said Lucy Weisz, deputychief of the state's Consumer Protection Division. "But it is our belief that consumers are entitled to know the full history of a vehicle -- and that includes if the vehicle has been stolen or damaged or sold previously."

The MVA does not dispute the right of dealerships to label such cars as "new." The problem was that the dealerships did not disclose that the cars had been damaged or stolen and returned.

In the current case, customers of Jerry's Chevrolet on Joppa Road and Perring Parkway and Jerry's Toyota on Belair Road bought the vehicles between June 1988 and August 1990, according to MVA records.

W. Marshall Rickert, the MVA administrator, said the agency chose to negotiate restitution rather than hold an administrative hearing because of the agency's belief that the dealerships did not intend to defraud the public.

Under the agreement, the MVA will suspend each dealership's license for a day.

"We are very concerned about this and tried to put this matter to bed," said John Sophocles, general manager of Jerry's Chevrolet. "We regret that this occurred."

Mr. Sophocles said that an internal communication problem kept the dealerships' salespeople from knowing that certain cars they were selling had been damaged or stolen and returned. But, he said, a new computer system has been installed in 1990, which guarantees that the salespeople know the history of all the cars they sell.

"Our new computerized system will allow us to know everything about every vehicle," said Mr. Sophocles, who said that selling the stolen and damaged cars had been done inadvertently.

All told, he noted, nearly 5,000 vehicles were sold by the two Jerry's dealerships between June 1988 and August 1990, the period covered by the state's investigation.

Lisa Shenkle, an MVA public information officer, said that, under state regulations, the agency could not have taken the Jerry's dealerships to an administrative hearing and still obtained restitution for the customers who had been wronged.

"It was more important for our administrator to make sure that our customers be made restitution than to proceed to an administrative hearing," Ms. Shenkle said.

"Had we felt strongly that the dealerships had purposely intended to defraud the consumers, we would have definitely moved the procedure into a hearing. They've shown they really want to make a good and a positive relationship with their customers."

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