On May 5, 2017, in record time, Susan Chana Lask settled a Federal consumer fraud case against New Jersey’s largest car dealer, Richard Catena, that allegedly stood to lose a fortune after customers learned they were duped. Catena sells to consumers nationwide, including New York, New Jersey and overseas. Read the Complaint
Lask filed the complaint in February, 2017 in New Jersey’s Federal District Court for her clients. It sounded the alarm that the used-car tycoon Richard Catena and employees at Richard Catena Auto Wholesalers Inc. were pushing and selling fake warranties to unsuspecting car buyers for years, according to the federal class-action lawsuit.
The plaintiffs claimed they were conned into buying the fraudulent after-market warranties for the luxury vehicles sold by Catena and his dealers from 2013 to the date of the complaint.
The lawsuit alleged that Catena sold warranties that did not exist, nor backed by state insurance funding requirements, and that Catena turned away customers if they attempted to execute the provisions of their warranties once their vehicles had mechanical problems.
Discovery revealed that only about 35 other warranties were sold of the type alleged in this case, which was not enough to create a class. The other 35 persons would have to file their own cases or the Attorney General would pursue the matter.
“I settled this action amicably in record time for the individual plaintiffs and gave the case to the Attorney General to pursue it for all other consumers, which getting the state’s attention was always the purpose of the case filing”, Lask says.
There may be other warranties that the Attorney General may find and pursue in addition to the 35 discovered by Lask.
In 2015, plaintiff Gregg Frankel purchased a 2011 Mercedes-Benz from Catena’s Teterboro dealership for $73,000. Frankel says Catena insisted he purchase Applied Protection Systems, LLC’s “Platinum Plan” for $3,000 in order to complete the sale.
The service contract states that Frankel’s Mercedes-Benz would be covered by Applied for four years or 50,000 miles, whichever came first.
In October 2016, Frankel took his car to a Mercedes-Benz dealership when it started experiencing water pump issues and the technicians there discovered that Applied Protection Systems, LLC did not exist, and neither did its phone number, e-mail address or website.
Co-Plaintiff William Bruner also purchased Catena’s alleged fake warranty for thousands of dollars at the urging of the used car salesman.
The lawsuit alleged that Catena knew the warranties were fraudulent but nevertheless sold them vigorously for its own personal gain, and that Catena never applied customers’ service contract funds to any warranty but rather pocketed the money.