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More Trouble for Lithia


As a follow-up to BW's breaking news stories on a current lawsuit against Lithia Ford (BW, News, "Stuck in Neutral," December 14, 2005), we have learned that Lithia Inc. of Medford, Oregon also faces major legal actions for fraud and racketeering in Orgeon. A review of court documents and articles in the Medford Mail Tribute confirmed that three multiplaintiff actions for over $34 million each have been brought forward by close to a total of 50 dissatisfied Lithia customers.

All three lawsuits allege that the dealership defrauded both customers and financial institutions by altering the credit applications of car buyers in order to increase sales. Lithia also faces customer litigation in Alaska and, according to the Portland Business Journal, it settled a similar case brought by a former employee, in June of 2003. Ex-employee Joe Kiefer II had originally asked for $4.5 million, but accepted $300,000, with the proviso that he not testify in any future proceedings against the dealership.

Customers claim that by exaggerating the value of used cars and their own annual incomes, Lithia locked them into unaffordable, high-yield loans. In addition, all lawsuits charge Lithia with adding nonexistent features to sales bills. BW requests for information from Lithia were referred to a public relations firm and not received by press time.