Texas Attorney General Greg Abbott announced late yesterday that his office had reached an agreement with Katy’s Don McGill Toyota over complaints that consumers were duped into signing lease agreements when they thought they were buying a car
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According to complaints received by the Office of the Attorney General, certain customers believed they were entering into vehicle purchase agreements, but were instead actually signing three-year vehicle leases.
The situation drew complaints when the customers wanted to own their vehicles outright, and the lease agreements were more expensive than an ordinary vehicle purchase.
Among other relief in AG’s settlement, Don McGill Toyota agreed to implement a restitution fund of more than $78,000 for consumers harmed by the financial scheme.
An investigation into the complaints revealed that some McGill sales personnel folded sales contracts in a manner that obscured the customers’ ability to view the entire document.
Salespersons also told customers that they would receive lower interest rates if their sales contract was prepared on a lease-type document. As a result, though customers were reassured their contract was a purchase, it was actually a lease.
Additionally, investigators learned that salespeople targeted customers who did not speak and read English well.
In other cases, some customers complained that they were misled about key financial details involving the transaction. Certain lease customers were told the term “residual value,” which appeared on the contract, meant the amount customers would receive if they sold the vehicle back to Don McGill after three years. However, “residual value” is actually the balloon amount customers have to pay to purchase their vehicles after the lease expired.
Finally, customers complained the dealership added expensive options to vehicles, even if those options were not authorized by purchasers.
For example, a “LoJack” vehicle security system was routinely included in the purchase or lease price even if customers did not agree to purchase the security system. In some cases, salespersons assured buyers that the LoJack system would be included at no additional cost, however customers were nonetheless charged up to $2,000 for this system.
The cost to the dealership for the system was less than $400.
InstantNewsKaty made several attempts to obtain a comment from Don McGill Toyota; however, no one at the dealership was willing to talk about the settlement.
The dealership is located on the IH-10 frontage road just east of Mason Road.
