Dan O'Brien Kia, of Concord, N.H., must pay $1.25 million to the New Hampshire attorney general to resolve allegations of unfair and deceptive practices at the dealership.
The settlement requires Dan O'Brien Kia to "comply with a series of strict injunctive terms over the next five years to ensure consumers are protected from similar practices in the future," according to the New Hampshire Department of Justice's Dec. 19 written release.
These terms include:
- Reimburse the attorney general $49,209 in legal costs.
- Hire an independent compliance monitor to review and report on its business practices for the next five years.
- Record audio and video of financing discussions between employees and customers.
- Pay restitution to two consumers who were victims of the deceptive practices.
- Implement staff training program to educate them on state consumer protection laws.
The Consumer Protection and Antitrust Bureau was investigating Dan O'Brien Kia Concord based on a high volume of consumer complaints filed between 2019 and 2021.
The bureau found dealership employees "persuaded consumers into purchasing vehicles they could not afford using deceptive sales practices; falsely inflated consumer income information on loan applications; and forged the signature of a customer on loan paperwork."
According to the attorney general, the dealership enrolled customers with poor scores in a "credit repair" or "credit rehabilitation" effort known as "the program." It was a six-month financing program used when a customer told the dealership they couldn't afford the payment terms.
Customers were informed they qualified for "the program," the attorney general's office charged, and if they paid their car loan on time for half a year, their credit score would improve and the terms could be refinanced. But it was nothing more than a sales pitch not affiliated or endorsed by any bank, despite the dealership saying it was. Instead, customers were left with loans they were unable to pay.
In addition, Dan O'Brien Kia was inflating the incomes of potential borrowers on their loan applications to increase their approval chances with lenders. If a borrower was denied funding, the dealership would often resubmit their application with a higher monthly income than the customer actually had in order to win approval.
The investigation found one instance of a loan document with a forged customer signature. The dealership employee who forged the signature also enrolled the customer in insurance products they previously had refused.
In addition to other terms, within 30 days of when the court approved the judgment, which was Dec. 15, the dealership must submit the name of a third-party candidate to serve as its independent compliance monitor, said Brendan Garod, New Hampshire senior assistant attorney general.
"Once they have selected a candidate, we approve that candidate," Garod told Automotive News. "That monitor will have regular reporting requirements."
The monitor will spend time in the dealership investigating and submitting frequent reports to the attorney general's office, he said. Dan O'Brien Kia must allow the monitor to review a set number of deals chosen at random, provide the monitor with requested documents and make employees available for interviews — all to ensure the dealership is in full compliance and not engaging in any deceptive practices.
Dan O'Brien, president of the dealership, was an Automotive News 40 Under 40 award winner in 2018, at age 33. He was recognized for taking over the store when it had average new-car monthly sales of 25 units and growing sales to 137 units within five months.
O'Brien owns Dan O'Brien Kia North Hampton as well, also in New Hampshire. That dealership was not involved in the allegations leveled by the state attorney general.
In a 2018 Automotive News story, O'Brien recalled throughout his career "seeing general managers and principals in offices obscured by tinted windows. He vowed then that if he ever got to run a store, he'd never do that." Only his store's finance manager had an office, he said.
A dealership representative refused to comment when reached by phone Monday.