NJ Consumer Affairs Files Second Lawsuit Against 21st Century Auto Group Alleging the Dealership and Owner Dmitry Zeldin Continue to Engage in Deceptive Business Practices
NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs today announced a lawsuit against luxury used auto dealership 21st Century Auto Group, Inc. (“21st Century Auto Group”), and its owner Dmitry Zeldin, for allegedly engaging in deceptive business practices, including many of the same practices alleged in a prior lawsuit the State filed against the Springfield-based dealership.
In a Complaint filed in Superior Court in Union County, the State alleges that Zeldin and 21st Century Auto Group repeatedly violated consumer protection laws and regulations by engaging in a pattern of deceptive practices that include failing to disclose prior damage to used motor vehicles, continuing to advertise motor vehicles after they had been sold in an attempt to “bait-and-switch” customers, and failing to honor advertised and negotiated prices of used motor vehicles.
Many of the allegations within the Complaint are virtually identical to allegations within the lawsuit the State filed against the dealership in 2013. In 2014, the State and 21st Century Auto Group resolved that lawsuit through a Final Consent Judgment (“2014 Consent Judgment”) through which the dealership agreed to pay $130,000, make extensive changes to its business practices, comply with state and federal laws, and refrain from engaging in any unfair or deceptive acts or practices in the conduct of its business in the future.
One of the new allegations against the dealership concerns its practice of selling “Gray Market Motor Vehicles”, which are motor vehicles manufactured for distribution and sale outside of this country, and thus may not meet United States’ safety and emissions standards.
Since the settlement was reached, the Division has received 41 consumer complaints concerning 21st Century Auto Group and Zeldin. The consumer complaints demonstrate that the defendants continue to fail to comply with the New Jersey Consumer Fraud Act (“CFA”), the Used Car Lemon Law (“UCLL”) and the state’s motor vehicle advertising regulations, and automotive repair regulations, the State alleges.
“Businesses can’t just sign a settlement agreement and then go right back to the same dishonest practices that got them into trouble in the first place. They must abide by the reforms set forth in the agreement, especially those requiring them to stop deceiving customers,” said Attorney General Grewal. “Businesses that demonstrate an inability or unwillingness to comply our consumer protection laws must face severe penalties for their repeated violations.”
“Not only did the terms of the prior settlement fail to deter 21st Century Auto Group from continuing its deceptive practices, our investigation revealed that the dealership’s alleged conduct has become even more egregious,” said Kevin Jespersen, Acting Director of the Division of Consumer Affairs. “Mr. Zeldin is going to learn the hard way that we have zero tolerance for those who flout the law by blatantly taking advantage of consumers over and over again.”
The 2018 Complaint alleges that 21st Century Auto Group and Zeldin engaged in deceptive practices that include:
- conducting credit checks without a consumer’s knowledge or authorization;
- failing to conspicuously post the total selling price of used motor vehicles;
- submitting false financial information to a lending institution;
- misrepresenting that certain used motor vehicles advertised and /or offered for sale were covered by a warranty;
- failing to refund monies paid by consumers after they cancelled the sales transaction;
- advertising used motor vehicles on the 21st Century Auto Group Website at a price that is much lower than the price posted on the vehicle at the dealership location;
- failing to disclose to a consumer prior to purchase that a used motor vehicle had sustained major flood damage; and
- representing that, as part of a negotiated deal, they will make certain repairs to a used motor vehicle and then, after the sale is consummated, failing to do so.
The State alleges that 21st Century Auto Group’s continued violation of consumer protection laws violates the 2014 Consent Judgment that settled the State’s previous lawsuit against 21st Century Auto Group, and a subsequent 2016 Amendment to the 2014 Consent Judgment (“Amendment.”)
Under the terms of the 2014 Consent Judgment, 21st Century Auto Group was also required to pay up to $20,000 for a compliance monitor that would, for the next year, check for its compliance with the law and the settlement terms. Two years later, the Amendment enjoined 21st Century Auto Group from advertising, offering for sale, and/or selling Gray Market Motor Vehicles, required the dealership to make an additional settlement payment of $25,000, and extended the term of the compliance monitor for an additional six months.
The 2018 Complaint also asserts that Zeldin is liable for the violations of the CFA, the UCLL and the motor vehicle advertising and repair regulations committed by the dealership. The State is ultimately seeking to terminate the dealership’s operations and permanently enjoin both 21st Century Auto Group and Zeldin from advertising, offering for sale, or selling used motor vehicles in New Jersey.
Investigator Kelly Fennell of the Office of Consumer Protection conducted the investigation.
Deputy Attorney General Jeffrey Koziar, of the Consumer Fraud Prosecution Section within the Division of Law, is representing the Division in this action.