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Motor Vehicle Commission fines dealership group $38,000 for unlicensed sales activity, deceptive advertising
Summary
The Tennessee Motor Vehicle Commission voted to impose civil penalties on a dealer group after legal staff reported unlicensed sales activity at a downtown showroom that misled consumers and involved misuse of temporary tags. The commission approved a $20,000 penalty for the unlicensed showroom and continued related complaints against affiliated,
Legal staff presented a summary of an investigation into alleged unlicensed sales activity, deceptive advertising and related recordkeeping problems involving three related entities owned by the same automotive group. Erica Smith (legal staff) told the commission investigators found unlicensed sales activity at a downtown showroom, confusing online advertising that made the showroom appear to be a licensed dealer, and use of temporary tags issued by a different licensed dealership.
Smith recommended a maximum-penalty approach given staff’s view of intentional violations and repeated warnings: a $20,000 civil penalty for the unlicensed showroom (respondent A), a $15,000 civil penalty recommendation for the affiliated licensed location (respondent B), and a $3,000 civil penalty for the licensed dealership that issued the temporary tags (respondent C). Smith said, “my recommendation for the showroom location, the unlicensed location, is a $20,000 civil penalty.” She also recommended opening complaints against the affiliated licensed entities.
Commissioners discussed details and enforcement options. Smith told commissioners investigators found that of six vehicles advertised for the showroom at the time of investigation, three had been sold and that showroom staff admitted facilitating at least 10 test drives per month; staff also found contract paperwork using the showroom address while temporary tags had been issued by another franchise in the same ownership group. Commissioners flagged public-safety and law-enforcement concerns tied to temporary-tag issuance and discussed remedies including consent orders, civil penalties and potential license suspension if violations continued.
Vote and outcome
After discussion, the commission adopted legal staff’s recommendation with a motion that was narrowed on the floor. The final recorded vote approved the recommendation for respondent A: a $20,000 civil penalty for the unlicensed showroom. Commissioners recorded an affirmative roll-call vote to adopt staff’s recommendation for respondent A. Staff indicated related complaints for the affiliated entities have been opened and will be presented for response and possible future action; staff said those matters may return to the commission at the April meeting for further action or formal hearings.
Context and next steps
Smith said the commission had previously informed the business in writing that the downtown space could operate only as a showroom and not as a licensed dealer location; staff and the executive director had made a compliance visit. Legal staff said the company had represented in writing that certain transactions were handled at a separate licensed location but that consumers searching online would find vehicles listed at the showroom address, creating consumer confusion and triggering third-party marketplaces to list inventory as if it were sold at the showroom.
Commissioners and staff said the agency plans to follow up: staff will send a proposed consent order and the entities will have time to accept or contest it; if they contest, staff said a formal hearing would be scheduled. Commissioners emphasized that repeated violations could lead to license suspension or revocation.
