Dan O'Brien Kia Dealership Pays $1.25 Million For Alleged Deception

Attorney General John M. Formella announces a $1.25 million settlement agreement with DMO Auto Acquisitions, LLC (“DMO”) dba Dan O’Brien Kia, to resolve allegations of unfair and deceptive acts or practices committed at the Dan O’Brien Kia dealership in Concord.

The settlement was approved today by the Merrimack Superior Court. It requires DMO to comply with a series of strict injunctive terms over the next five years to ensure consumers are protected from similar practices in the future.

The settlement is the result of an extensive investigation by the Consumer Protection and Antitrust Bureau into the business practices of DMO initiated after the volume of consumer complaints filed against DMO drastically increased between 2019-2021. The investigation revealed DMO employees engaged in three distinct types of deceptive acts or practices that violated New Hampshire consumer protection laws. Specifically, that DMO employees persuaded consumers into purchasing vehicles they could not afford using deceptive sales practices; falsely inflated consumer income information on loan applications; and forged the signature of a customer on loan paperwork.

Use of Deceptive Sales Pitch

The investigation revealed that between 2019 and 2020, DMO utilized a sales pitch referred to as either the credit repair program, credit rehabilitation program, or the six-month financing program (the “Program”). The Program was used as a last-ditch effort to close a sale when a customer informed DMO the terms of the approved financing were outside of their price range. The Program was used to convince customers to agree to accept loans that they admittedly could not afford. Customers were told they had qualified for the Program and that if they made timely payments on the loan for six months, the customer’s credit would improve significantly and DMO would then be able to assist the customer in refinancing the loan to a more affordable rate.

The investigation revealed that Program did not actually exist and was nothing more than a carefully calculated sales pitch. There were no written policies, procedures, literature, or information available for the customers to review. The Program was not endorsed or affiliated with any financial institution despite representations by salesmen that it was affiliated with well-known banks.

Customers who relied on the Respondent’s assurances that they would refinance the customers’ loans after six months of timely payments were ultimately left in a contractual obligation to pay a loan that they could not afford.

Fraudulent Inflation of Customer Income

The investigation also revealed that DMO was deceptively inflating the income of potential borrowers on applications for financing approval. Between 2019 and 2020, customers interested in applying for financing were required to provide their monthly income as part of the application process. A DMO employee would then use the customer’s monthly income, as well as other information to solicit financing offers from various banks and credit unions. On several occasions between 2019-2020 DMO employees would submit a customer’s accurate information only to receive declinations from all potential financing sources. On several occasions, DMO employees would then resubmit customer applications shortly after receiving declinations and would falsely increase the income of potential borrowers on subsequent applications in order to increase the chances of obtaining approval.

Forgery of Loan Documentation

The investigation also revealed that in one instance, a customer’s signature was forged on loan documents that were then submitted without the customer’s approval. In addition to forging the loan documents, the DMO employee signed the customer up for multiple insurance products that the customer had expressly stated she did not want. The insurance documents were also submitted without the customer’s knowledge or approval and were ultimately

Settlement Terms

DMO will be required to:

• Make a payment of $1,250,000 to the Attorney General on behalf of the State.

• Reimburse the Attorney General for $49,209.50 in legal costs incurred in the investigation of this matter.

• Hire an independent compliance monitor to review and report on its business practices for the next five years. The monitor will work closely with the Attorney General’s Office to ensure DMO remains in full compliance with state consumer protection laws.

• Audio and video record all substantive financing discussions that occur between DMO employees and customers.

• Pay restitution to two consumers who were victims of the deceptive sales practices.

• Implement an approved training and education program for all DMO staff to ensure knowledge of and compliance with state consumer protection laws.

The case was investigated by Senior Assistant Attorney General Brandon Garod and Investigator Calice Ducey of the Consumer Protection and Antitrust Bureau.

If you or someone you know has experienced unfair or deceptive acts or practices by a New Hampshire Business, contact the Consumer Protection and Antitrust Bureau of the Attorney General's Office by calling (603) 271-3641.