Hoosiers should be beware of advertising pitches that mislead consumers into thinking they have won significant prizes. This tactic is often employed to lure people to locations where they are subjected to used-car sales pitches, Indiana Attorney General Curtis Hill said in a press release.
Despite successful legal actions taken previously by the Office of the Attorney General against this tactic, advertising firms and auto dealerships continue to put it into practice.
Recently, the Office of the Attorney General filed two complaints against auto prize mailing promoters engaging in this conduct — one in Bartholomew County in south-central Indiana and one in Lake County in northwestern Indiana. The name of the auto dealer in Bartholomew County may ring a bell with Lintonians, as Heritage of Linton, LLC, which was formerly located at 289 A St NE in the old Kramer Motor Sales property. In fact, the company has went by several names, including Heritage of Valparaiso, LLC and Heritage Automotive Sales, LLC. They all track back to Loren K. White, though, who has signed various forms with the Indiana Secretary of State in various capacities of LLC member, owner, and registered agent.
In the Bartholomew County case, Budget Direct Mail Promotions LLC (BDM) and Heritage Automotive Sales LLC designed and ran a promotion for a sales event at Heritage Automotive. BDM and Heritage Automotive are owned by the same individual. The Attorney General’s complaint alleges BDM sent mailings to 40,000 Indiana recipients that included game pieces indicating that each recipient had won one of six specified prizes: $10,000, $5,000, $1,000, $500, a 55-inch flat-screen TV or a Yamaha ATV.
When 142 recipients took their mailings to Heritage Automotive’s sales event to claim their prizes, each recipient was instead subjected to a sales pitch soliciting the purchase of a vehicle. The recipients were finally informed they had not won any of the six prizes prominently represented on the mailing. Each recipient instead received a $5 gift card to either Kroger or Walmart. The mailings also failed to include proper disclosures required by Indiana law.
In Lake County, the Attorney General’s complaint alleges Rush Hour Events LLC promoted and ran a sales event on behalf of an Indiana vehicle dealership.
To promote the sales event, Rush Hour Events sent promotional mailings to 33,325 Indiana recipients. Each mailing created the impression that the recipient had won a significant prize. The recipients of the mailings were directed to the dealership to claim their prizes. Once lured to the dealership, 116 recipients were subjected to a sales pitch urging the purchase of a vehicle. The recipients of the mailings were eventually awarded their “prize” — a cheap “smart watch.” The mailings also failed to include proper disclosures as required by Indiana law.
“Most car dealers in Indiana are good, honest, hard-working professionals,” Attorney General Hill said. “Unfortunately, every industry has its share of individuals who seem bent on skirting the law in order to maximize profits.”
He urged Hoosiers to be vigilant.
“When it comes to these advertising schemes that promise great prizes just for showing up, we encourage consumers to remember the old maxim that if it sounds too good to be true, it probably is,” Attorney General Hill said. “As we work to enforce the law and impose penalties against anyone violating the rules, we also advise Hoosiers to take steps to avoid becoming victims in the first place.”
Attorney General Hill offered consumers these three tips regarding prize mailings:
- Be skeptical. It is highly unlikely you won any significant prize. Even if your mailing contains a game piece showing you won a significant prize, it is likely that every mailing sent contained an identical “winning” game piece. Checking the fine print on the mailing will likely reveal that the odds of winning a significant prize is one in tens of thousands.
- If you wish to see whether you have won a prize, be prepared to handle a sales presentation for a new vehicle. The mailing was sent to get you into the dealership to sell you a vehicle. If you’re not in the market for a vehicle, inform the salesperson of this fact and request your prize. Be prepared to say no and walk away if the salesperson continues to push a sale.
- If you do end up deciding to purchase a vehicle at such a sales event, take your time and check various resources such as vehicle history reports and the Attorney General’s “Purchasing a Vehicle” fact sheet. The salesperson will likely push you to buy immediately, but doing your due diligence on a used vehicle purchase is almost always the better option.
Anyone who believes they have been the victim of a scam or targeted by scammers should file a complaint with the Office of Attorney General at indianaconsumer.com or by calling 1-800-382-5516.