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WICHITA, Kan. -Two Wichita car dealers, which stirred a legal flap here by advertising-without credit union approval-special sale “events” and listing local CUs as participants say they are withdrawing their ads and will stop such promotions. Local CUs here joined by the Kansas Credit Union Association had warned the dealers against “misleading and deceptive” advertising by using the CU name to promote an “official credit union” sales event lacking a CU sponsor. Both the Sedgewick County District Attorney and Kansas Attorney General Phill Kline, it was learned, had notified the dealers, Mike Steven Motor Group and Mel Hambelton Ford, that they were on shaky ground in promoting CU sponsorship without getting approval from CUs identified in the ads. Bob Thurman, president of the $165 million Credit Union of America, said while the idea of dealers relying on the CU name to sell cars is flattering, CUA as well as more than 20 other Wichita-area CUs listed in the ads had never authorized their support for the “customer appreciation event” tailored specifically to CU members. “It’s simply a matter of these dealers trading off our good name to promote their own interest without our endorsement or involvement,” said Thurman Harold Johnson, chief financial officer of Mike Steven, which owns eight Toyota, Chrysler, Dodge and Kia dealerships, said he was “sorry and surprised for the bad feelings that were created and that credit unions were upset,” but that he has long enjoyed the business received from credit union members. Mentioning credit unions in an ad “brings additional business,” he said. The ads, which appeared in the Wichita Eagle as “10 Big Days” of sales for “Credit Union Members” from June 12-June 21 have been discontinued, he said. Johnson acknowledged the dealership did receive calls from the Sedgewick County District Attorney’s office. It was understood the DA’s Consumer Fraud Division had been contacted to investigate the dealer advertising. He said dealership’s attorneys had been consulted “and they told us there was no violation but we still ought to respect the wishes of credit unions.” Jeff Hambelton, general manager of Mel Hambelton Ford, said his agency had “no problem” in halting the ads adding “we are happy to volunteer” after consulting with legal counsel. He said he had heard from “a couple of credit unions” which, since the ad controversy, are now eager to set up arrangements for their members under new agreements. Hambelton acknowledged that a “marketing” arrangement would be altered, but he did not detail exactly what steps might be taken since direct mail letters were sent out May 30 to Wichita CU members by a Springfield, Ill. marketing firm, with a name coincidentally similar to CUA – “Credit Union Services of America.” The Hambelton letter discussed a June 7-8 “Credit Union Sales Event” in which “we have negotiated credit union pricing on all vehicles.” The letter adds that “due to the number of credit unions participating in this two day event you may be eligible for credit union rates, even if you are not currently a member.” Thurman said the dealers “tried to live off our reputation or piggybacking and we simply disagreed with that approach.” He said the district attorney’s office was informed and a “cease and desist” order was discussed. Thurman said the similarity in names – his CU and “Credit Union Services of America” – was troubling and confusing to members who had called the CU for clarification. Attempts by Credit Union Times to reach CU Services in Illinois were unsuccessful, but a spokesman for the Kansas Credit Union Association said an east Coast league recently encountered a similar experience with CUs and dealers, also involving an Illinois marketing firm. Details surrounding the East Coast tie-in were not immediately available. A spokesman for the Kansas Automobile Dealers Association said it would be contacting the two Wichita dealers regarding the advertising, but overall “we have a very good relationship with Kansas credit unions.” -

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