Complaint Review: Selco Credit Union

AG Files $239,000 Agreement With SELCO Auto Resource For Misleading Advertising

July 1, 2004

Attorney General Hardy Myers today filed a $239,000 settlement agreement with a Eugene car buying service requiring it to immediately stop advertising that its service is free when it isn't. Named in an Assurance of Voluntary Compliance filed in Marion County Circuit Court is SELCO Group, Inc. that does business in Oregon as SELCO Auto Resource (SAR). The AVC admits no law violation.

"Buying an automobile is stressful enough for consumers without being deceived about services and fees," Myers said. "For almost a year, customers trusted this company to assist them in making a good buy on a car but ended up paying an undisclosed profit."

Department of Justice investigators, working from a tip, found that SAR misled consumers by touting its program was "free" or that it didn't charge anything for consumers to use its auto buying service when in fact, the company charged an average of $650. SAR also told consumers that the dealers paid a marketing fee to participate in the program when in fact, they did not.

Investigators found that SAR salespersons negotiated a broker's price with the dealers and then told the dealer how much to mark up the invoice for their profit. The adjusted invoice that included the hidden profit was presented to the consumer as the price of the car.

SAR, an independent corporation apart from SELCO Credit Union, also of Eugene, must make changes in its advertising of services and conspicuously disclose fees charged for services before concluding any car transaction.

As part of the Assurance, SAR agreed to return $119,556 in restitution to 184 Oregon victims, who paid from $100 to $1,853 for the so-called "free service." The company also paid Justice $119,556 for its Consumer Protection and Education Fund.

Consumers wanting information about purchasing new and used vehicles (in Spanish and English) may call the Attorney General's consumer hotline at (503) 378-4732 (Salem area only), (503) 229-5576 (Portland area only) and toll-free at 1-877-877-9392. Justice is online at www.doj.state.or.us.

Contact:
Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us

http://www.doj.state.or.us/releases/pages/2004/rel070104.aspx