Insights

Washington State Attorney General Bob Ferguson announced that a used car dealer, Zein Automobiles Inc., which operates Best Bet Auto Sales and Independence Auto Center, agreed to pay $250,000 to settle claims that it engaged in a pattern of discriminating against Spanish-speaking customers at its dealerships.

Zein, also known as ZAG Auto Group, placed ads in Spanish-language media, promising financing even for those without a credit history. According to the AG's press release, most of the salespeople at Zein's dealerships speak Spanish, and half of the dealerships' sales are conducted in Spanish. The dealerships allegedly orally offered Spanish-speaking customers one set of terms but then presented a different set of terms in documents written in English.

As a result, the AG claimed that Zein and its employees misrepresented finance terms, interest rates, title branding issues, and warranties, in violation of the Washington Law Against Discrimination and the state's Consumer Protection Act.

The press release cited two examples of Zein's misrepresentations:

• All of the documents one customer signed for the car he purchased were in English, and he relied on the salesperson to orally communicate what he was signing. He believed his interest rate was 3 percent, when in fact it was nearly 30 percent, a fact he did not find out until later.
• Another customer bought a previously totaled vehicle, despite being told in Spanish that the dealership did not sell cars that had been in accidents. Because most conventional banks will not finance cars with "salvage titles," he was saddled with a nearly 30 percent interest rate.

Investigators found that Zein targeted Spanish speakers by spending the vast majority of its advertising budget on Spanish-language airtime. Some of its Spanish-language advertisements suggested that Zein was a "miembro activo de la comunidad hispana local" - an "active member of the local Hispanic community" - to lure Spanish-speaking customers.

In a consent decree, Zein agreed to

• pay $250,000 in restitution, costs, and fees;
• make Spanish-language contracts available whenever it advertises in Spanish and provide them to customers when the sales transactions are conducted in Spanish;
• honor all warranties promised in its advertisements, including six-month and one-year warranties; and
• cease any deceptive or misleading practices in its advertising or sales, including making any statement that creates a false impression regarding the premise of a sale, the warranty available, the monthly payment, the interest rate, or any other term of payment.

The AG's office estimated that as many as 3,000 customers may be eligible to receive money from the settlement and urged consumers who bought vehicles at one of the company's two dealerships and believe they may be victims of the discriminatory, unfair, or deceptive practices detailed in this case to call the AG's office or fill out a Spanish or an English claim form that is available online.

Keep in mind that the Federal Trade Commission requires certain Spanish-language disclosures if a transaction is negotiated in Spanish. In addition, if a transaction is negotiated in a language other than English, a number of states and localities require that certain disclosures - or all documents the consumer is being asked to sign - be given in that language. Even if the state or locality in which you operate does not require you to provide the documents you are asking a non-English-speaking customer to sign in his or her primary language, you should consider doing so, especially for customers who speak a language to which you target your advertising.