DARCARS Honda and owners face civil charges for alleged deceptive sales practices

A DARCARS Honda dealership in Bowie, Md., allegedly engaged in "unfair or deceptive trade practices at nearly every stage" of new-vehicle sales, according to civil charges filed in July by Maryland Attorney General Anthony Brown.

The state Attorney General's office alleges that the dealership along with parent company Mariam Inc., doing business as DARCARS Automotive Group, and owners John Rahmangholi Darvish and Jamshyd Darvish violated Maryland's Consumer Protection Act.

The Attorney General's statement of charges says DARCARS Honda tricked customers by adding a fee equal to 2 percent of the vehicle's sales price, misleadingly labeling it as an optional "sales commission." However, this fee wasn't a commission, and customers didn't realize they could refuse to pay it, according to the filing.

Since at least January 2019, DARCARS Honda advertised new-vehicle prices on its website that were misleading and customers ended up paying over the advertised price, including significant charges for preinstalled equipment and an "Adjusted Market Value" charge, which the statement of charges alleges is just a dealer markup.

"It is important that if a car dealer is going to advertise the price of the vehicle, that the price include everything that the consumer is going to be charged," Philip Ziperman, deputy chief for the Maryland Attorney General's Consumer Protection Division, told Automotive News.

A Honda of Bowie spokesperson said in a statement that the "case is not supported by the record or the facts."

"Over the last two years, Honda of Bowie has cooperated fully with the Maryland Attorney General to respond to its request for information and address its concerns," according to the DARCARS statement.

The DARCARS spokesperson said they are "prepared to defend our company and our lawful practices in court against these baseless claims."

The dealership also is accused of illegally financing the sale of add-ons such as "DARCARS Assurance" and the "DARCARS Protection Plan." The store allegedly included unwanted equipment and products in the sale and failed to clearly list and itemize everything customers were paying for, along with the costs.

Consumers should "make the dealer explain everything that's on that piece of paper," Ziperman said, and dealers "need to be as transparent with their consumers as they can be."

The Attorney General's Consumer Protection Division is seeking an injunction to stop the alleged violations and is also demanding restitution, economic damages, penalties and costs for the claimed breaches of Maryland's Consumer Protection Act.

A hearing is scheduled to begin Oct. 29 at the Office of Administrative Hearings in Maryland.

If the agency finds DARCARS Honda of Bowie violated the Consumer Protection Act, it would require the dealership to "cease and desist from engaging in unfair or deceptive trade practices" and take corrective action, including providing refunds to consumers, according to the statement of charges. The dealership also could face a penalty of up to $10,000 for each violation of the act.

DARCARS Automotive Group, of Bethesda, Md., ranks No. 31 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 24,862 new vehicles in 2023.