Ledgewood auto dealer fined $693,000 for consumer fraud

A Roxbury auto dealer has been fined more than $693,000 for more than 640 violations of consumer-protection laws following legal action brought by the Attorney General’s Office and the State Division of Consumer Affairs.

Superior Court Judge Stephan C. Hansbury, in Morristown, ordered RLMB, Inc., a used car dealership located on Route 46 in the Ledgewood section, to pay $693,645.91 after finding that it violated the State’s consumer protection laws and regulations a total of 640 times. The final default action followed legal action brought by the Attorney General’s Office and the State Division of Consumer Affairs.

RLMB, operating as Bloom Auto Sales, failed to file a response to the complaint, according to a statement released Thursday by Acting Attorney General John J. Hoffman.

The state’s 10-count complaint, filed in March, alleged that RLMB and its manager, Michael L. Bloom Sr., violated the Consumer Fraud Act, motor vehicle advertising and automotive sales regulations and the Used Car Lemon Law and other regulations by advertising used motor vehicles for sale without disclosing to consumers the vehicle’s prior damage or prior use; selling vehicles “as-is” when they qualified for a warranty; and permitting third parties to advertise, offer for sale or sell used motor vehicles on Craigslist that were titled to RLMB.

Bloom's attorney, Robert Kobin, said his client was under the impression that he had "worked out" all but one of the charges with the attorney general after being under investigation since October of 2012. The final charge, Kobin said, was related to a former employee, hired to run the retail division of Bloom's wholesale-retail operation, who was fired at the end of 2012 after "this and other issues came to light."

"We thought it was resolved, and then they filed these charges in the spring," Kobin said.

Health problems and an ongoing trial related to the former employee, Kobin said, limited Bloom's ability to file a timely response, resulting in the default judgment this week. Kobin said he is currently working with his client on a lengthy affidavit to address all the charges.

"There was one minor technical issue, but other than that, they are way off base," Kobin said of the judgment.

According to Hoffman, violations by RLMB included:

Failure to provide consumers with title and registration to used motor vehicles prior to the expiration of temporary title and/or registration;

Requiring consumers sign blank sales documents;

Offering used motor vehicles for sale at the dealership location that did not have prominently displayed the Federal Trade Commission Used Car Buyers Guide, a document which, among other things, indicates whether such vehicle comes with a warranty;

Offering for sale used motor vehicles that did not have the total selling price conspicuously posted;

Advertising and/or offering for sale used motor vehicles through the RLMB website, without the required statement that “price(s) include(s) all costs to be paid by a consumer, except for licensing costs, registration fees and taxes."

RLMB also was charged with failure to itemize documentary service fees and, since at least 2007, has failed to pay the 50-cent administrative fee for each used motor vehicle sold, as required by the UCLL and UCLL regulations.​

The judgment requires the defendants to pay $640,000 in civil penalties, $31,200.91 in reimbursement to the state for its legal and investigative costs and $22,445 in restitution to seven consumers.

“The penalty ordered in this matter is appropriate and should send a clear message to all motor vehicle dealerships that violating our consumer protection laws and regulations comes at a steep price,” Hoffman said.  “We are continuing to review the practices of new and used motor vehicle dealers to ensure consumers are not taken advantage of.”

Staff Writer William Westhoven: 973-917-9242; wwesthoven@GannettNJ.com.