Attorney General Keith Ellison sues used-car dealer for deceptive sales

SAINT PAUL, Minn. (KTTC) – On Tuesday, Attorney General Keith Ellison announced that his office has filed a consumer protection lawsuit against a Fridley-based used-car dealer Midwest Car Search (MCS) and its owner, Scott Spiczka.

The lawsuit suggests that MCS is guilty of the following allegations:

It mispresents its used cars as certified when they are not,
It illegally adds expensive vehicle service contracts to consumers’ purchases without their consent,
It refuses to provide warranties that it is required to provide by law,
It fails to make accurate “Buyer’s Guide” disclosures and provide such disclosures in Spanish, as required by law, and
It conducts business under an unregistered name that heavily targets and exploits Spanish speakers.

According to the lawsuit, MCS fraudulently sold more than 3,000 vehicles to Minnesotans from 2017 to 2022.

“Affording your life is tough enough without bad actors taking advantage of you. A car is a necessity for many, and Minnesotans should be able to shop for cars without having to worry about being deceived or defrauded,” Attorney General Ellison said. “But that’s what Midwest Car Search did. They broke the law and violated consumers’ trust by misrepresenting the nature and quality of the cars it was selling, while also illegally including expensive add-on products in purchases without disclosing them. Equally appalling is that Midwest Car Search aggressively targeted Spanish speakers through widespread advertising campaigns in Spanish and conducted sales in Spanish, only to have those speakers sign documents in English that bore no relation to the promises Midwest Car Search made to them. I look forward to holding these bad actors accountable for cheating Minnesota consumers.”

The investigation into MCS’s business practices was prompted by a number of complaints from ‘Spanish speaking customers who were specifically targeted in MCS’s advertising,’ according to the lawsuit.

The lawsuit also claims that MCS had an active social-media marketing campaign that had advertisements in Spanish under the name “Coches MN,” which MCS never registered as an assumed name as required by law.

Misrepresentation of Vehicle Certification

By law, dealerships are required to inspect their used cars for any deficiencies, must be sold with a warranty, and their cars must not have sustained any damage that impairs safety, among other conditions to be allowed to lawfully sell their used cars in the state of Minnesota.

According to the lawsuit, MCS has claimed on Facebook, on websites like carsforsale.com, to consumers and an investigator with the Attorney General’s office that their cars are fully certified.

During the investigation, the Attorney General’s office found that none of the 3,245 cars sold by MCS between 2017 and 2022 were certified. The lawsuit suggests this was the case because MCS often sold cars “as-is,” implied their vehicles had warranties, or because consumers were not provided with an inspection report.

The lawsuit highlighted a case where MCS assured a consumer that their cars were certified and that a test drive was not necessary. When the consumer picked up his car from the dealership, he discovered a number of mechanical problems including jerky steering and the need to replace the exhaust manifold, the exhaust gasket, the tire rods, the strut assemblies, and other gaskets.

Illegally Adding Expensive Vehicle Service Contracts to Purchases

Vehicle service contracts (VSC), which typically require the owner to make an up-front, out-of-pocket payment, are a contract between the new owner and the vehicle provider where the provider agrees to cover replacement or repair of certain parts for a limited amount of time.

During the investigation, the Attorney General’s office reviewed 200 individual consumer files from MCS and found that all 200 transactions failed to properly disclose that a VSC would be included in the purchase for an extra cost.

According to the lawsuit, from 2020 to 2022, for buyers that required financing for a VSC, MCS charged 99 percent of them an average of more than $1,800 for the VSC.

The lawsuit also noted that Zachary Spiczka, the son of MCS owner Scott Spitzka, was among the one percent of buyers who did not require financing and did not have a VSC added to his purchase.

Illegal Disclaimers of Required Warranty Coverage on Vehicles

According to Minnesota law, car dealers are required to provide an express, written warranty on sales of used vehicles. Nearly half of the used cars MCS sold between 2017 and 2022 were entitled to warranty protection under Minnesota law based on the age, price, and mileage of the car.

According to the lawsuit, the Attorney General’s office found that MCS routinely provided consumers with paperwork indicating their vehicles were sold “as is” or otherwise tried to disclaim warranty coverage, despite advertising their vehicles were covered.

Since the amendments made to Minnesota’s Used Car Law that became effective August 1, 2023, this lawsuit is the first action that the Attorney General’s office has filed against a used car dealer. The lawsuit targets MCS’s conduct both before and after the amendments took effect.