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Multiple Kansas agencies investigating Lawrence Kia

Kansas Consumer Protection Act at issue
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Posted at 6:26 PM, Jun 23, 2020
and last updated 2020-06-24 18:06:30-04

LAWRENCE, Kan. — Multiple Kansas agencies are now investigating potentially illegal business practices at Lawrence Kia-Mitsubishi.

The investigations come following several I-Team stories last week involving accusations of falsified loan applications sent by the dealer to customers' lenders.

Rick and Janene Rist are longtime Lawrence Kia customers.

They currently drive a 2017 Kia Sorento with monthly payments around $670.

According to the Rists, those payments reflect debt from two trade-ins with Lawrence Kia.

In 2015, the retired couple bought a $60,000 K 900 luxury sedan Lawrence Kia sold them, even though the couple's monthly income is $4,000.

After the Rists realized they couldn't afford the car payment, two trade-ins with Lawrence Kia later, they're still making about the same monthly payments they did for the K 900 and are still paying for it, even though they no longer have it.

Rick Rist said he now realizes it was a major mistake.

"There's no way we would've been able to qualify for a $60,000 car on $4,000 a month income," he said.

"They got ripped off. Every vehicle they got to try to get out of it was done the same way," said former Lawrence Kia salesman Ron Zahorik.

Zahorik said he first started working at Lawrence Kia in 2014, but he left due to the dealership's business practices and claims to this day, he's owed a $2,000 bonus he was never paid.

The 41 Action News I-Team has records showing dozens of Lawrence Kia customers submitted their monthly incomes to the dealership on a program called Promax.

Those same records show sales managers inflated those incomes to their lenders on every one of the loan applications we obtained.

Former Lawrence Kia employee Mark Kavanaugh told the I-Team he found hundreds of deals with falsified incomes in a period of just a couple months.

Zahorik said he believes similar deals have been going on for years.

"Word that there's probably hundreds of cases. I'll bet that's probably more like thousands," Zahorik said.

Following 41 Action News' stories, the I-Team has confirmed multiple Kansas agencies are now investigating Lawrence Kia-Mitsubishi.

They include the Office of the Kansas Bank Commissioner, the Kansas Attorney General's Office and the Douglas County District Attorney's Office.

"Anytime we hear of a situation where a lender, a supplier has done something fraudulent that puts the public in danger, we're always interested in finding out what that is," said Charles Branson, Douglas County District Attorney.

Records the I-Team obtained show there have been complaints against Lawrence Kia dating back months.

In a response to a records request, the Kansas Attorney General's Office wrote they have 14 closed complaints against the dealer and also wrote about "Our ongoing investigation of the complaint alleging a violation of Kansas law."

RELATED | Wells Fargo Auto suspends loan applications from Lawrence Kia

In another response to a records request, the Kansas Bank Commissioner provided the I-Team with two now closed complaints.

One of them is from a customer from this past November who wrote, "I'm scared that if the bank were to request my W2 it would appear that I lied when in fact I told the truth, the dealership lied."

However, that customer withdrew the complaint.

The second one was from a former employee from this past December.

That former employee wrote, in part, "I have never seen so much fraud as with this dealer. Inflating incomes, payment packing such that customers don't realize they purchased gap insurance or extended warranties. Forgeries, signing customers' names to documents. You name it, it happens."

But according to the bank commissioner, that former employee, who wished to remain anonymous, never officially filled out a complaint form or provided documents, so the case was dropped.

Now after getting new information this past weekend, the bank commissioner has opened a new investigation into Lawrence Kia.

"We don't necessarily work in conjunction with them, but we would certainly share information with any like law enforcement or state agencies that are investigating this matter," Branson said.

The I-Team reached out to Lawrence Kia's attorney, Alyssa Brockert, about the open investigations of the dealership.

As of Tuesday evening, there'd been no response.

"We're pretty disappointed with what's going on with Kia right now," said Janene Rist.

The Douglas County District Attorney has just started his investigation, but Branson said his office has already heard from several interested people.

Customers who believe they've been impacted by a potentially falsified deal are asked to call the Douglas County District Attorney's Consumer Protection Division at (785)330-2849.

Both the Kansas Bank Commissioner and the Douglas County District Attorney are investigating potential violations of the Kansas Consumer Protection Act, which bars deceptive acts and practices in consumer transactions.

Each violation carries a $10,000 civil penalty.

A successful case may also result in a court order or injunction to prevent the business engaging in those acts from entering into future transactions.