An appeals court has upheld GM’s decision to terminate a New Jersey Chevy dealership, Mall Chevrolet, over a series of falsified warranty repair claims. The ruling was grounded in substantial evidence presented by GM which indicated the dealership had manipulated repair claims, including work conducted on “ghost vehicles.” General Motors has issued chargebacks worth hundreds of thousands of dollars over allegedly false claims.
According to a report from Automotive News, the decision, written by Judge Peter Phipps, described General Motors’ investigation into the dealership’s warranty practices, beginning in May 2017, which revealed extensive evidence of fraudulent claims.
Following a regional review, GM uncovered a pattern of suspicious warranty work involving vehicles owned by companies like CarMax, Carvana, and DriveTime. The automaker promptly informed the dealership that any further claims involving these companies would require prior approval. Shortly thereafter, a service adviser at Mall Chevrolet resigned, hinting at knowledge of internal misconduct in a text message to colleagues.
Subsequent audits reinforced the automaker’s concerns. General Motors initially flagged over $98,000 in dubious warranty claims, eventually finding more than $672,000 worth of questionable work. The automaker’s investigation uncovered a systematic issue involving 517 job card deviations affecting 346 vehicles, some of which couldn’t be verified as ever being at the dealership. General Motors’ follow-up audit identified 186 deviations that could not be corroborated, resulting in a significant chargeback.
Despite providing over 1,000 pages of documents in defense, Mall Chevrolet could only substantiate 12 of the deviations, leaving the majority of the discrepancies unresolved. The court found the dealership’s explanations lacking, stating they were “feeble” and insufficient to counter the automaker’s “avalanche of evidence.”
Judge Phipps’ decision upheld General Motors’ right to terminate the franchise agreement, highlighting that the dealership’s internal processes encouraged fraudulent claims, largely due to financial incentives linked to warranty commissions. A GM spokesperson declined to comment on the decision, and legal representatives for the dealership did not respond to inquiries.
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Comments
No surprise this was in New Jersey.
Tony Soprano motors.
Tony Soprano motors
Thats Nasty New Jersey.
Ahh, yes. Mall Chevrolet, in Cherry Hill, NJ. Attempted to buy a car from them (twice) – once in 2007, and again in 2012. Walked out both times, and purchased elsewhere. This doesn’t surprise me in the least.
Next time buy from Paramus Chevrolet. These guys were featured as one of the few dealerships that weren’t marking up their vehicles during the chip shortage. They were only charging you MSRP on most vehicles (except Corvettes).
Barlow Chevy in Delran is very good. Pretty close to laid back sales style. The service dept is pretty good. They also didn’t participate in the market adjustment trend other dealers were doing during the pandemic.
Wife had a 2016 Yukon Denali with condensation in the taillight. Had an extended warranty. Service rep says it’s not covered under your GMPP warranty, ya $5,000 plus for it. Not covered under my protection plus warranty I said, we’ll see about that. Called warranty holder myself. You guessed it…it’s covered. If I’d paid the $975 plus install for the light that dealership would have put it through the warranty the next day…..GUARANTEED!!! It ain’t just New Jersey where this sh$t is happening. Try Calgary, Alberta.
Hello GM Please Check out Vandergriff Chevy in Arlington TX. I bought a car almost 2 months ago and had to take it back twice for brake defaults and the roof leaks when it rains and it a 2021 Traverse.
“a 2021 Traverse” : 3 years old.
Did not indicate warranty work
Umm didn’t read the article, this was about a dealer making false claims to GM. You bought a used car with a leak? How is this the same…smh`
Keef while I agree that the car they bought was used for the money that these used cars cost it should have been detected in the pre-sale inspection by the dealership mechanic. Every car I ever bought from a dealer was inspected before they sold the car to usually I would have to wait a day to pick up my newer car. if this was a private sale thrn your 100% right you buy the car as is.
Hello GM Please Check out Vandergriff Chevy in Arlington TX. I bought a car almost 2 months ago c 2021 Traverse and they said it wasn’t covered. The brakes squeal and the roof leaks when it rain and the said it’s not covered. They have had my car for 3 weeks now. They want return my calls. Please look into this.
This is not GM. You’re directing your request to the wrong place.
This is a web site that focuses on GM vehicles, not affliated with General Motors in any way.
BTW, you do not state whether the vehicle warranty is still in effect, or if it has expired. It is possible that if the warranty is 36 months, that time has expired
Time and/or mileage affect whether any warranties are in effect.
If normal warranty is expected to still be in effect, based on the above time and mileage, it is also possible that there is no warranty if the vehicle been a rebuilt collision or otherwise, salvaged unit.
If you cannot get satisfaction, ask the service manager to explain very clearly why and prove it to you with supporting documentation.
If the explanation you receive is not acceptable or valid in your opinion, request the number for GM Customer Assistance from the dealership and make a phone call.
Make sure to have all valid information for the vehicle, repair orders, any and all documents, mileage etc, etc.
If the manufacturer would pay the technician for the actual time it took them to properly fix the vehicle, these things might not happen. But Mary needs her bonuses. So business as usual
The techs are well paid, no good reason to back up GM for bogus warranty claims. The dealerships have been ripping off the general public for years!!
Over my 50 years of buying new cars (mostly GM) I’ve had my share of gripes about techs and to this day , have trepidations whenever I bring one of our cars in for service. If I can possibly perform the service requirement, I do but probably shouldn’t because I’m more than a bit old in the tooth. Ok, that’s related to our two Hondas.
I must disagree with “Roy” who said techs are well paid. I have a friend who has worked as an “A” mechanic at several GMC dealerships since he left high school decades ago. The problem is “piece work”. For the uninformed, the book only pays the tech the number of hours the job theoretically should take. The book, in the majority of cases, cheats techs on the clock and most techs have no choice but to rush the job just to get paid fairly for their efforts.
This is a practice at many domestic and foreign dealerships. The majority of “A” level techs earn somewhere between 50-75K annually which isn’t exactly making them rich. “B” level and new grease rack employees make far less.
But paying for all the time it might take an inexperienced tech to repair something in 6 hrs that really should take three hours is not fair to the customer. I don’t want to pay for your inexperience.
That’s the problem I our world today it’s about money, money, and more money…it’s not about people with values who want to make the customer happy therefore making that customer a potential customer for life instead you get a run around and have to pay thousands of dollars or be forced to buy another car. When will humans ever learn money isn’t everything.
GMGUY
Never has a truer statement been made. I’m a GC and the lack of care for services provided is appalling. It is across the board in everything we deal with day to day, from big corporations to ice cream stands. I guess its who we are now. Sad.
Joseph Ryan it’s not just car dealerships…all big corporations are greedy. I work part time for UPS for 26 years I’m still there and you should see management scramble to get us done by 9 at night even though nothing goes out of our building until 9:30, then if something like a next day air gets left behind our supervisor is like oh well nothing I can do about it now! There is absolutely no respect for customers anymore and they treat the employees like dog $hit…no wonder nobody wants to work here anymore they can’t find people to do this job because of this yes the pay and benefits are great if you can handle being harassed and rushed for 4-5 hours a night. My point is this greed is killing our country the middle class is becoming the poor class where does it end!
Gmguy didn’t you just go on strike for more money?
If UPS is such a terrible place to work, why have you stayed there for 26 years???????
Because there is no other place you can work part time and get health insurance and paid vacation.
I bought a new car Monday (yah!), and the dealer said, we make ALL our money on service department. They cover Sales.
There is little made on the direct sale of the vehicle but he is misleading you because they do make money off new vehicle sales outside the “cost” of the vehicle and the sale price. The money is hidden in other holdback and bonus programs.
It’s very difficult to track all the profits. Stems from them wanting to hide how much they pay for a vehicle to reduce haggling.
Hey of course they make money on New sales and probably make more on the used trades and really stick you up in the service department! I love shopping and negotiating my deals on line and been doing this for last 25yrs and I have purchased vehicals as far away as 500miles to get what I want for My Price!
Ignoring the possible inaccuracy of the statement, that’s what you want. Dealers either do well through sales or service (or possibly both). What you don’t want is a service department that no one goes to because they don’t do good work. In my experience, those that don’t do good work tend to be the high-volume sales dealers.
The idea is that the fixed operations departments (parts and service), make all of the money to pay for overhead and dealership operating cost. Sales is supposed to be profit. If fixed ops is not hitting 100%, the dealership could fail quickly. Your salesperson was correct.
In other news, soon to be Mall Ford in New Jersey will be open soon ……At the previous location of Mall Chevrolet…
There’s no way that will happen. One of the largest and most successful Ford stores in the country is based about 4 miles from where Mall Chevy is (was). Chances are someone else will pick up the franchise and drop another Chevy dealership in there.
This is the second crooked Chevrolet store GM has closed in this area. Some years back there was a dealership called Chevrolet 73 that was playing all kinds of nasty games with financing, and one day GM attorney’s showed up with transporters, padlocked the doors and hauled all the inventory away. The same thing happened to a local Ford dealership maybe 35 years ago. I friend of mine had a hard time getting his F-150 back that happened to be in for service the day Ford closed the place.
That’s just 1 dealership, every dealership is dishonest, giving you false amounts on the cars to maximize their profits. Every package and destination charge you see on the window sticker is already included in the invoice of the car. Your essentially being charged twice for them. It’s not illegal to do this, just extremely immoral. And what about these BS documentation fees, another way to make free money. Disgraceful greedy trash. What politicians palms for greased on that.
NOT every dealership is dishonest. My wife worked in the office and she has worked at 3 other dealers and has told me the last one was the most straight forward, do it by the book honest dealer she ever worked at. When they get audited they barely find anything because the owner hates to give anything back to GM. So your claim of ALL dealerships is false because I know it’s not true at least with this one.
Absolutely agreed. I worked as a technician at one GM dealership for over 23 years and every customer’s vehicle was treated with the same level of care and respect, as if if it was my wife’s vehicle used to ferry our kids or parents around.
Doing the job right first time, and leaving absolutely no trace of our presence under the hood, interior or other surfaces after even major repairs is something that some of us take pride in our workmanship.
Not a wire out of place or fastener left loose, full attention to detail paid on every vehicle, every time, that is the goal of truly professional technicians.
The same is true of the business staff, warranty clerks, parts department and more. Active dealership prinicipals, responsible department managers surrounded by trained employees, can make a huge difference in the customer experience.
Dealerships have differing rates of self-authorization for warranty repairs and unlike the old audits of paper repair orders, every employee and department can be audited with a few clicks of a computer mouse.
Many times, special approvals are required to complete various types of repairs, even to order the parts.
It is people whom choose to be dishonest and paint all in any trade with a broad brush, when the number of dishonest types is likely far lower than many might guess. Incompetency, well that’s another story.
It abounds in most every industry and business, but inability from a lack of training or incompetence for other reasons,should not be confused with dishonesty.
Technicians are very thin on the ground everywhere these days, so finding a good technician to fill that vacant service bay can be a crapshoot at times.
Hiring and vetting that new employee closely, is absolutely necessary to ensure that the customer and business needs are met with competency, honesty and integrity.
Before moving into training, vetting and mentoring were roles that I was paid additional monies for, but also took very seriously.
Unfortunately, there are the unscupulous people in every business who leave a trail of devastation in their wake, that ultimately comes at the expense of lost customers and an honest business left picking up the pieces, after a transient “high baller” has left the building and a trail of devastation.
“Tarring all with the same brush” is something that no person should experience in any work evironment, due to the actions of a few.
Falsification of warranty claims is not new, too much incentive to do so. Today with computerized record keeping, getting away with it over such a long period is unusual, particularly on such a large scale.
Sales rep in Okotoks Alberta told me personally that 20 years ago techs all had box cutter knives in their coveralls to perform surgery on CV boots. Right from the horse’s mouth boys!!! Absolute 100% fact!!! They would spray grease in a circular motion under the vehicle to look like it was coming out while the shaft was rotating.
That didn’t happen.
Ya it did. Can give you the salesman’s name and the name of the now defunct dealership that changed owners and name. Never said it was an Okotoks’ dealership, only the salesman who was privy to it. It definitely happened!
Didn’t happen so much it unhappened things that did.
@Keef it has a lot to do with the article. I said I bought the car March 26 and from March til May 9,2024 I still haven’t gotten my car back. They said I have to come out of pocket to pay for the repairs. NOT!!!! Texas has a Wonderful lemon law. Now read and keep scrolling
Which completely #s everything up for those of us with legitimate warranty work.
No wonder getting a warranty claim is becoming more and more like getting an insurance claim.
I purchased my 2016 Malibu there they were not my normal Dealer but they had allot of cars. They got the one for the sale and brought it up from Maryland for me. Aggressive sales but they did a nice job. Service and repairs were ok but I their were higher then my normal dealer so I Returned to them. But seems they charging false warranty claims I saw the Service Manager and most of advisors leave. Before I left I see on the page the General Manger is gone and all the Finance guys.
Now I know why.
I bought my first car which was a Chevy Malibu RS 2020 and weeks after making noise took it twice still making noise took it three times for the same thing in top of that finding out there was no emergency brake and some one in my city bought the same car I took in for lemon law and still with the other car I got from same dealer puente hills Chevrolet the parts I got replaced for are doing the same thing had my car for a leak didn’t even bother on offering a loan car knowing my car was there for almost a month disappointed with Chevy brand my car is a 2021 Malibu Rs there nothing rally sport about it I regret it yu get rid of impala ss cruse as atleast make the Malibu as knowing dodge Honda Hyundai all have sport in the car Chevy just worry about there suv and trucks you guys robbed me and if yu see this message ceo of Chevy or whoever reads this you guys owe me a real rally sport Malibu no premium no black edition that’s ain’t crap yu suck
So you really thought RS stood for “RALLY SPORT” LOL these days that means as much as R/T on an Italian makeover 4 cylinder Dodge Dart buyer beware! Next time you buy any car look up the model on that magic thing called the Internet and get all the information you need on that model car. As far as the dealership I don’t trust those greedy pigs.
Takes the word “stealership” to a whole new level 🤣🤣🤣
Funny thing is, I have seen this happen before. A dealership I worked at was trying to get a big expense job covered under warranty for a customer because of what was happening to their car. Everything is not always as they seem. A lot of those false claims could have been them actually not charging a customer in service when they should have, and “covered” them under warranty. If you were that customer, you wouldn’t be so smug about the dealership. But in the end, wrong is wrong.
I wish I had known this, I was the Service Manager there for a year, I would have spilled my guts over what was happening in that service dept and dealership