Appearing like a Lottery scratch-off ticket, a mailer shows up in your mailbox, saying you could win thousands of dollars in cash or a new TV. Scratch away, and it shows you’re a winner — you just have to pick up your prize at a local dealership.
On April 7, Oregon Attorney General Ellen Rosenblum announced a crackdown on four car dealerships that have engaged in these deceptive promotional mailers. After investigating four Oregon dealerships, including Brad’s Cottage Grove Chevrolet and Sheppard Motors in Eugene, the Oregon Department of Justice announced the dealerships must collectively pay $493,774 in costs to the state and $148,517 in restitution to more than 1,700 affected consumers.
Eugene Weekly investigated Brad’s dealership in a July 9, 2020, cover story after obtaining evidence and employee testimonies from DOJ, as well as Oregon Bureau of Labor and Industries complaints regarding retaliatory firings.
“Consumers were mailed colorful and fun advertisements that seemed so easy. Scratch off the ticket or pull back the tab to see if you won! Many of the ‘prizes’ indicated that you had won hundreds, if not thousands, of dollars,” said Rosenblum in a press release statement. “But, when the consumers went to redeem the prize in the dealership they quickly learned it was all a ploy to get them in the door. No real money was on the line.”
In July 2018, the Oregon DOJ began its investigation of Brad’s Cottage Grove Chevrolet after a consumer filed a complaint regarding a June “Play Super Jackpot” mailer, according to a press release from the agency. The mailer was a scratch-off that indicated a consumer had won $3,500 cash, but after traveling to the dealership, the person learned they only won $5.
According to a 2018 letter to the Oregon DOJ obtained by EW, a consumer recalls receiving one of the prize promotions.
In 2018, Michael Whitney received a mailing that said he could win up to $25,000 in cash, a 60-inch TV, $3,500 in cash or a $5 bill. He pulled a tab from the mail and scratched a piece off. The numbers matched up, signifying he won. To find out what he won, he had to call a hotline number, which he did.
“A woman came on the line, and I indicated that it looked like I had won a prize from Brad’s Chevrolet,” Whitney recalls in a letter to the Oregon DOJ. “She then asked me for my name, which I gave her. She then asked what sort of car I drove.”
The woman then made an appointment for Whitney to collect his prize at 11 am. While at the dealership, Whitney says he overheard another prizewinner tell a salesman that he won $3,500. The salesman replied “that it was just a way to get you into the business where you could see how nice we are and build up a relationship,” according to the letter.
Whitney ended up driving 30 miles each way from his home to the dealership to spin a prize wheel that landed on a $1 prize.
DOJ interview transcripts of sworn statements by Brad’s employees from its investigation into the dealership obtained by EW show that what Whitney actually won was the chance to spin a prize wheel during a promotional period spearheaded by a third-party contractor. Employee interviews with the DOJ paint a picture of the dealership’s employee base that had problematic experiences with a company that used “deceptive” promotional methods to get customers in the door. And one employee who participated in the interviews alleges that he experienced employer retaliation for talking too much with the DOJ.
According to Oregon DOJ’s April 7 press release, months before mailing the scratch-offs, Brad’s dealership also ran a promotional campaign called “Sell Down of the Century,” promoting a zero percent financing rate. The dealership didn’t disclose eligibility conditions.
Then in January 2019 while Oregon DOJ’s investigation was ongoing, the dealership ran another promotional campaign called “Stone Cold Deals,” which promoted the zero percent financing again. According to the Oregon DOJ, the dealership also misrepresented another program that said more than $200,000 in prizes were available — and included a photo of winners of checks that weren’t won at their dealership.
Brad’s will pay $68,141.50 in restitution by the end of April 2021 to 31 consumers who were believed to be charged above the advertised price, according to the settlement file. The settlement lists recipients who overpaid for their vehicles and the amount owed ranges from $1,000 to $5,000. The dealership will also pay $180,000 in three payments to the state, separate from the restitution.
By entering the settlement, Brad’s also agrees to several conditions. One is to not advertise any more prize promotions, such as the scratch-off program. Others include not sell a vehicle above the advertised price, not engage in false credit applications, and Brad’s must display the correct advertised price for vehicles and not misrepresent the cost and terms of a newly purchased vehicle. The dealership also has to retain legal counsel to ensure it is complying.
In 2017 and 2018, Sheppard Motors in Eugene ran similar prize promotion advertisements, according to the April 7 press release from the Oregon DOJ. The promotion was sent to about 70,000 consumers, indicating that they had won $750 — but they only received a smartwatch valued at $29. The Eugene dealership will pay $16,450 in restitution to 392 consumers who responded to the prize promotion advertisements, ranging from $124 to $2,728, and $125,000 to the state over three years.
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