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Auto dealership on probation after state found it charged non-existent state inspection fee

Auto Nerd operates in Beech Grove
Auto Nerd car dealership in Beech Grove
Posted at 6:00 AM, Mar 10, 2021
and last updated 2021-03-10 18:25:36-05

INDIANAPOLIS — A local car dealership is on probation with the state following a WRTV hidden camera investigation into their business practices.

Records show the Indiana Secretary of State’s office took action against Auto Nerd, including imposing fines against the dealership.

The state found the dealer failed to timely deliver titles to two customers within the state’s 31-day requirement.

The Indiana Secretary of State’s office also found Auto Nerd charged nearly a thousand customers a $60 fee labeled “Secretary of State Compliance Officer Inspection."

The problem — the state does not charge dealers or consumers a compliance officer inspection fee.

Records show Auto Nerd charged the fee as part of its document preparation fee to a total of 918 consumers for a total of $55,080 between March and August 2019.

The state’s actions come after a February 2020 WRTV Investigates hidden camera investigation into Auto Nerd following complaints from Indianapolis consumers like Brian Murphy, who said the dealership didn’t tell him the car’s underside was completely rusted out.

“The vehicle was completely unsafe to drive,” said Murphy. “I was pretty shocked and upset.”

Undercover WRTV employees asked a worker at Auto Nerd’s Greenwood location whether certain vehicles on the lot had been wrecked before.

We asked about the crash history of four vehicles — a Cadillac, a Volkswagen Rabbit, a Ford Focus, and a Volkswagen Passat.

Each time WRTV asked, the salesman said the vehicle had not been in any crashes.

“Any of the cars here really haven’t been wrecked,” said the salesman. “We don’t buy stuff like that.”

WRTV: “Any recalls on this or anything?

Salesman: “Ah, nope.”

WRTV: “Do you guys check recalls and stuff before you put them out?"

Salesman: “Yep. Sure do.”

What the salesman didn’t know is that WRTV Investigates ran the vehicle identification numbers beforehand and Carfax reported all four vehicles had prior damage from crashes.

The Rabbit also had an open recall — a problem with the vehicle’s antilock brake system that can cause the vehicle to lose control.

Following our February 2020 report about whether Auto Nerd was being forthcoming with buyers, the Indiana Secretary of State’s Auto Dealer Services Division took action against Auto Nerd.

On April 24, 2020, the state issued $200 in fines after it found Auto Nerd failed to timely deliver titles to two customers within the state’s 31-day requirement.

The state’s action did not involve how the dealer discloses vehicle histories.

But what the state did find is still concerning, according to Indianapolis attorney Andrew Ault, who specializes in car dealership practices.

"It's just obvious when you pay for the car, you get the title and that's the end,” Ault said. “So, for any delay on that, that is a real dealership issue that has to be remedied."

Rachael Ehlich, director of the Indiana Secretary of State’s auto dealer service division, said it’s important for car dealerships to get titles to their customers.

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"If the dealer does not get the title application to the BMV or get you the title so you can submit it, you are not going to be able to get plates to drive the vehicle without risking a ticket and potentially getting impounded," Ehlich said. “It's definitely one of the top complaints we get."

On August 6, 2020, the Secretary of State reached a 7-page agreement with Auto Nerd.

It found the dealership charged customers a $60 fee labeled “Secretary of State Compliance Officer Inspection.”

The problem — the state does not charge dealers or consumers a compliance officer inspection fee.

Records show Auto Nerd charged the fee as part of its document preparation fee to a total of 918 consumers for a total of $55,080 between March and August 2019.

As part of the agreement with the state, Auto Nerd agreed to send letters to each customer informing them the fee, "was not charged or collected by or on behalf of the Indiana Secretary of State's Office."

The Indiana Secretary of State’s office said they did send the letters as required.

"They did comply with that, it all went out certified mail,” Ehlich said. “They are currently in compliance."

The state placed Auto Nerd on probation through August 2021, which means they can still sell cars but could face harsher penalties like increased fines or a license suspension if they’re found in violation of the agreement during the probation period.

Auto Nerd also agreed to attend dealership training as part of the agreement.

We reached out to the company for a response.

"It's public record,” said Brandon Hockett, in an email to WRTV. “There is no statement needed."

Hockett has not provided his current position or title with Auto Nerd to WRTV Investigates, and Hockett has not responded to an email asking whether the employee in the February 2020 investigation is still working for the dealership.

Auto Nerd currently operates in Beech Grove.

They closed their Greenwood location last year, the same spot where we got the hidden camera video.

Auto Nerd's former Greenwood location

Auto Nerd's former Greenwood location

Last year, Auto Nerd also directed us to their website which showed some of the cars include links to Carfax reports free of charge.

“The treatment of our customers and the integrity of our staff are two areas of business we take very seriously,” read Hockett’s statement from January 2020. “Transparency is one of the foundational values we attribute our success to.”

Consumers have filed 58 complaints with the Attorney General against Auto Nerd since November 2016, 24% of which were for unsafe or defective products the complaints.

Most of the complaints were settled with the consumer or resolved with no violation found against Auto Nerd.

The state has not taken action against Auto Nerd for how it discloses the condition of vehicles.

The Indiana Attorney General’s Office investigated Brian Murphy’s complaint but did not find any violations against Auto Nerd.

"It is the duty of the consumer to inspect the vehicle for any defects that may be present on the vehicle at the time of sale,” read a statement from the Indiana Attorney General.

"They'll definitely be on my radar in the future,” said attorney Andrew Ault.

Ault said consumers should be vigilant when buying a car.

BEFORE YOU BUY A CAR:

  • Check to see if the dealer has had any disciplinary action from the state at dealers.sos.in.gov
  • Run a VIN check to look for crash and recall history
  • Do not take a salesperson at their word
  • Get all promises in writing
  • Read the fine print before signing

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