Peter C. Harvey, Attorney General

Division of Consumer Affairs
Reni Erdos, Director

For Immediate Release:
July 1, 2004

For Further Information Contact:
Jeff Lamm, Genene Morris
973-504-6327

NEWARK - The State and DaimlerChrysler Services North America LLC ("DaimlerChrysler Services") have entered into a consent agreement that resolves consumer protection issues involving leased vehicles, including, among other things, charges for excessive wear and damage, overpayment by consumers of sales taxes and other amounts on leased vehicles, and failure to provide the consumer with required information about the Gross Capitalized Cost of the lease, Attorney General Peter C. Harvey and Consumers Affairs Director Reni Erdos announced.

Without admitting any liability, DaimlerChrysler Services agreed to pay $1.9 million to the State for its investigative costs and attorney's fees and for use in other consumer initiatives.

The consent order also requires DaimlerChrysler Services to do the following, among other things:

• Refund any overpayment of state sales tax to a lessee within 30 days;
  
  
• Refund any lease overpayments within 30 days;
  
  
• Include in every lease a disclosure of Gross Capitalized Cost and a statement of the lessee's option to receive a separate written itemization of Gross Capitalized Cost;
  
  
• Provide the lessee with an invoice for amounts being claimed for excess wear and damage to the vehicle within 10 business days after the vehicle is returned;
  
  
• Include within the invoice a notice of the lessee's right to obtain independent appraisal of excess wear and damage; and
  
  
• Make available to lessees a toll-free customer service telephone number to address any lease inquiries.

Under terms of the consent agreement, the Division will forward written complaints from consumers to DaimlerChrysler Services for a period of one year. DaimlerChrysler Services is required to respond to the consumer and the Division within 30 days after receiving a complaint. Any unresolved complaints will be submitted for arbitration, in accordance with the lease provisions. DaimlerChrysler Services has agreed to pay the filing, case management and other costs and fees associated with the arbitration (excluding attorneys' fees and witness fees).

"This agreement with DaimlerChrysler Services is far-reaching and goes beyond resolving the consumer complaints received to date," Attorney General Harvey said. "DaimlerChrysler Services will change its business practices to provide greater disclosure to consumers and also to enhance the training of its employees involved with leasing vehicles. Both of these actions will help avoid future issues for lessees."

"DaimlerChrysler Services and Consumer Affairs have resolved 47 of the 52 consumer complaints that have been received by the Division, and I expect the others to be resolved shortly," Erdos said, adding that DaimlerChrysler Services has been cooperative with Consumer Affairs staff. "These consumers, in bringing their issues to us, have helped to improve the leasing process for others down the road."

Deputy Attorney General Lorraine K. Rak of the Division of Law represented the State in this matter and Investigator Kelly Fennell of the Office of Consumer Protection handled the investigation.