Koons Kia Dealership Owes Over $1 Million Back to Scammed Customers

Kia dealerships seem to be a magnet for drama. While the Kia Telluride SUV might be one of the most popular new cars on the market, that doesn’t mean the dealerships are falling in line. Koons Kia dealership in Maryland has to pay its customers back over a million dollars after tacking on bogus fees during the buying process.

Koons Kia dealership has to return over $1 million to customers

Koons Kia Dealership owes money to scammed customers
A Kia dealership sign against the blue sky | Igor Golovniov/SOPA Images/LightRocket via Getty Images

The Maryland Attorney General, Brian E. Frosh, put out an official press release this week regarding one Kia dealership in Baltimore, Maryland. Koons Kia of Reisterstown Road, Inc, is in big trouble regarding bogus fees. The documents state that Koons Kia decided to tack on extra fees to the purchase of a vehicle under the guise of “freight charges.” Koons Kia did not include these charges in any of the advertised prices for Kia cars and SUVs added on at the end. Dealerships and manufacturers factor shipping fees into the advertised price already.

The Attorney General has instructed Koons Kia dealership to stop charging these fees to consumers. Taxes and title fees are acceptable as these are known and advertised. Koons may no longer charge a different price for a Kia than what is advertised on the Manufacturer Suggested Retail Price (MSRP). It has also agreed not to charge extra for shipping or freight charges if the dealership already included these prices in the advertised price. Koons Kia has agreed to return all fees previously collected from buyers under false pretenses. The dealership agreed to return any extra fees collected for shipping freight already included in advertised prices.

This Kia dealership has agreed to return more than $1 million to customers, the Attorney General said. The dealership also owes the Division $100,000 for the investigation.

This Kia dealership participated in “unfair and deceptive trade practices”

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In the Assurance of Discontinuance, more information about Koons Kia’s deceptive practices is described.

“The Consumer Protection Act makes it an unfair, deceptive or abusive trade practice to make statements that are capable of misleading consumers or to fail to disclose material facts, the omission of which deceives or tends to deceive consumers.”

Assurance of Discontinuance | Office of the Attorney General, Consumer Protection Division

The Attorney General went on to say that this practice is an “unfair and deceptive trade practice” that the Consumer Protection Act explicitly prohibits. Initially, Koons denied any wrongdoing. Soon after, the Kia dealership also agreed to forgo a trial to solve the issue faster and easier.

Attorney General Frosh commented that dealerships need to honor the advertised price of the vehicles. “I am glad that Maryland consumers will receive refunds for the fees that they paid above the advertised price,” Frosh said.

If you are a customer of Koons Kia and believe you overpaid for your vehicle, the Consumer Protection Division will contact you. Customers do not need to do anything else as the investigation has uncovered those who overpaid. Part of the agreement included Koons Kia providing a spreadsheet with the name, address, phone number, MSRP, and other pricing information to the AG. Customers can reach the Attorney General’s office at 410-528-8662 or 888-743-0023 with any questions.

These are not the same as dealership markups

With all of the changes to new and used car prices in the last few years, many dealerships have added a “dealership markup” to the price. This is different from what this Kia dealership did, but still a bad practice. A dealership markup is just an additional cost added to the MSRP due to supply and demand or any other reason the dealership might come up with. In recent years, the semiconductor chip shortage has made the supply of new cars dwindle, driving prices up.

It is not uncommon to see a popular car with a dealership markup added. Some Kia Telluride SUVs were marked up by $25,000 thanks to this practice. Similarly, Toyota 4Runner SUVs, Mercedes-Benz G-Wagons, and various other cars had a hefty price tacked on as a dealership markup. These are generally easy to spot and say “dealership markup” on the window sticker or online listing. Shady, but not illegal. The Ford Maverick and Jeep Wrangler are experiencing this right now.

As long as Koons Kia pays back the money as agreed, this dealership should be operating in the clear soon. Hopefully.

RELATED: Is the 2021 Kia Telluride Worth an Extra $25K?