AutoNation Settles $650,000 'Pink Slip' Suit For California Consumers

RIVERSIDE COUNTY, CA—A judge has ordered a network of automobile dealerships owned and operated as subsidiaries of AutoNation, Inc. to pay $650,000 six California counties as settlement of a consumer protection lawsuit.

The $650,000 payment includes $450,000 in civil penalties, $150,000 in investigative costs, and $50,000 to support statewide consumer protection efforts in a case brought by the District Attorney’s offices of Riverside County, Los Angeles, San Francisco, Santa Clara, Sonoma, and Ventura Counties, which joined the civil action filed last year in Santa Clara County Superior Court.

According to the complaint, AutoNation dealerships "sometimes failed to comply with the 30-day window of notifying the Department of Motor Vehicles whenever a vehicle was sold and the registration was transferred to a new owner." The settlement includes California's 42 AutoNation dealership subsidiaries. In addition to improving the company's pink slip policies, the dealership also agreed to create and enforce policies to ensure that consumers receive registration and ownership paperwork promptly.

AutoNation's corporate headquarters shared their response with Patch, saying: "Customer service, including timely registration and title processing, is a top priority at every AutoNation dealership. While we regret any delay, many of these delays occurred as a result of Covid-19 pandemic challenges or for other reasons outside a dealership’s control."

Riverside County District Attorney Mike Hestrin commented on the win, totalling $100,000 for his Riverside County.

"Our office is committed to holding businesses accountable for any violations of consumer protection laws," he said. "We will work diligently to ensure that consumers are treated fairly and the laws are followed."

Los Angeles County District Attorney Nathan Hochman weighed in on the settlement.

“Californians who buy a used car have a legal right to own the car they purchased without the stress of not knowing if or when they will receive title and registration,” Hochman said. “These laws exist to protect consumers from companies that take hard-earned money from consumers without upholding their end of the deal. The Los Angeles County District Attorney’s Office will not tolerate any excuses for breaking consumer protection laws. I thank my office’s Consumer Protection Division for their diligent work on this case, and our district attorney counterparts across California for their partnership in protecting Californians.”

Prosecutors said the suit stemmed from the company's failure to comply with California Vehicle Code regulations regarding registration transfers.

Under the settlement, AutoNation agreed to rectify and enforce policies at its California dealerships so that registration and ownership documents are submitted on time.

AutoNation dealerships also agreed to create and enforce a host of policies to ensure that consumers receive registration and ownership paperwork in a timely manner. These include:

• placing a “stop” on the sale of used vehicles when they do not have title in hand or a clear path to getting it within 30 days;
• deferring sales commissions on the sale of any used cars that are not capable of a timely transfer;
• requiring that prior to any sale, a smog check or VIN verification is performed, as necessary;
• having at least 10 employees available at all times to process ownership transfers; and
• ensuring that a designated employee at the level of regional manager or higher is responsible for overall compliance.

The AutoNation dealerships resolved the action and did not admit fault in the complaint allegations.