Sonic Automotive Inc. sounded like it had found religion in 2002 after some of its dealerships were stung by finance & insurance “packing” charges.

The nation's third-largest dealership chain responded to a Florida state attorney general's investigation by revamping personnel and practices at all of its dealerships.

Sonic ended up firing 200 staffers, most of them in F&I and sales positions. “We have instituted a zero-tolerance policy,” declared Sonic Vice President Jeffrey Rachor.

The main culprits were Clearwater (FL) Toyota and Clearwater Mitsubishi where unethical employees deceptively slipped unrequested F&I products into vehicle purchase orders.

Sonic's corrective steps included instituting “100% menu selling” and requiring employees to watch and periodically re-watch special training tapes on F&I ethics, said Rachor.

It was all to prevent another “Clearwater.”

So why, after Sonic all but vowed it wouldn't happen again, did it happen again?

This time it occurred in front of hidden news cameras as Sonic dealership personnel unknowingly gave Dateline NBC plenty of material for a TV expose on F&I fraud and deception.

NBC took flak afterwards. Criticism centered on the integrity of Dateline's main source, Duane Overholt. He admits to 20 years of cheating customers while working at dealerships.

The last one he worked at was Sonic's Clearwater Mitsubishi.

He was fired from there for alleged forgery. He claimed wrongful termination, sued and settled. He started a new career as a paid consultant to lawyers gunning for dealerships.

Overholt says a Christian religious conversion reformed him and inspires his self-styled campaign to clean up dealerships. Detractors say he's motivated by fees from litigators who specialize in suing dealerships. Dateline NBC got rapped for failing to mention Overholt's new line of work.

Focusing on him obscures two greater points. One, there are still wrongdoers in automotive retailing whose misdeeds give everyone else in it a black eye. Two, they must be banished once and for all.

As long as rogues work at dealerships, expect more ugly headlines, lawsuits and investigations. Consumer activist Joan Claybrook, in connection with the Dateline NBC story, is calling for probes of dealerships in all 50 states.

Dealers who tolerate Slim Shadys in the F&I office are asking for it because it's open hunting season on dealerships these days. The vast majority don't deserve it. It only takes a few.

Sonic seemed sincere when it launched its F&I reform movement of two years ago, even though it failed enough to provide an hour's worth of prime-time fodder fired at the dealership world.

Obviously Sonic's remedial effort was lost on some rank-and-file staffers. That may reflect a weakness on the part of a publicly owned company unable to control all that goes on at individual stores. Or it may be a case of the home office publicly decrying unsavory F&I practices, but unwittingly causing them by pushing stores for higher and higher F&I profits.

The “Big Six” dealership chains depend on those. They boosted their F&I revenues 11% in 2002 to a record $1.21 billion.

Sonic's not the only megadealer to get into F&I trouble. AutoNation Inc. and UnitedAuto Group recently landed in it after some F&I managers at their stores allegedly packed customers' loan terms with unordered service agreements, GAP contracts and credit life insurance policies.

There's a savior. Sonic hit on it during the go-around of 2002. It's menu selling. Done right and at every F&I presentation, it offers a fast, customer-friendly, full-disclosure, stay-out-of-trouble and still-be-profitable approach to selling — provided it's not in bad hands.

It's the industry's job to douse these F&I fires and get rid of the unrepentant arsonists who start them. That requires the collective efforts of dealers, their associations and auto makers.

Although some people question Overholt's credibility, he's right about one thing.

Amid hungry-eyed attorneys, Joan Claybrooks on crusades and newshounds sniffing for dirt, “dealers can either make a change on their own or be forced to make it.”