Schneiderman: When Consumers Shop For A Car, They Should Not Be Misled By Deceptive Dealerships Looking To Make Illegal Profits
Attorney General Eric T. Schneiderman today announced a lawsuit against two Staten Island dealerships owned by SG Hylan Motors Corp. d/b/a Honda of Staten Island, Staten Island Honda, Nissan of Staten Island and Staten Island Nissan (collectively “SG Hylan Motors”). The lawsuit, filed in New York Supreme Court, alleges that SG Hylan Motors unlawfully sold “after-sale” products and services, including credit repair and identity theft protection services, to over 2,300 consumers. These extra products could sometimes exceed costs of $2,000 per consumer, and the charges were applied without the knowledge of the car buyer.
“When consumers shop for a car, they should not be misled by deceptive dealerships looking to saddle consumers with hidden costs,” said Attorney General Schneiderman. “Unfortunately, some dealers pad their pockets with fees for products and services that unaware consumers don’t need, and don’t want. We will continue to crackdown against car dealerships that seek to unfairly take advantage of ordinary New Yorkers.”
According to the lawsuit, the SG Hylan Motors dealerships used deceptive sales tactics, including charging consumers for services while concealing such additional charges from the consumers, or by misrepresenting that the services were free. In fact, consumers did not receive the credit repair and identity theft protection services for which they were charged.
The court papers also allege that the SG Hylan Motors dealerships collected more than $2 million from consumers between 2011 and 2014 using these kinds of deceptive tactics. The suit seeks a court order prohibiting the dealerships from engaging in such practices in the future and directing them to refund all illegally obtained overcharges to consumers.
SG Hylan Motors arranged with an independent company, called Credit Forget It, Inc., to sell credit repair and identity theft protection services beginning at least in 2011. It is a violation of state and federal law to charge upfront fees for services that promise to help consumers restore or improve their credit. Contracts that violate the credit repair laws are void.
The court papers further allege that the SG Hylan Motors dealerships added on charges for other after-sale items like security systems and special tire protection services without clearly disclosing what they were charging for such services. The costs of these services were often bundled into the vehicle sales price and not separately itemized. As a result, unknown to the consumer, the price of the car stated on purchase and lease documents was inflated by the amount of these after-sale items or services.
This lawsuit is part of the Attorney General’s initiative to end the practice that automobile dealers call “jamming,” or charging consumers for hidden purchases. In 2015, Attorney General Schneiderman announced a settlement with Credit Forget It, Inc., the company that purported to provide the credit repair and identity theft protection services. Since 2015, the Attorney General has settled with 9 dealership groups for amounts totaling nearly $16 million in restitution and penalties. Nearly 20,000 consumers were eligible for restitution under these settlements.
The settlements include the following dealerships:
- Paragon Auto Dealership: a group of automobile dealers in Queens and Westchester counties, including Paragon Honda, Paragon Acura, and White Plains Honda
- Plaza Auto Dealership: a group of dealers located on Nostrand Avenue, Brooklyn, including, Plaza Toyota-Plaza Scion, Plaza Hyundai, Plaza Honda and Acura of Brooklyn
- Manfredi Auto Dealership: a group of dealers located on Hylan Blvd, Staten Island, including Manfredi Fiat and Fiat of SI, Manfredi Mitsubishi, Manfredi Kia, Manfredi Hyundai, Manfredi Cadillac, Manfredi Chrysler Jeep & Dodge, Manfredi Fiat Inc., S.I. Toyota, Manfredi Toyota and Manfredi Scion, Manfredi Subaru, Manfredi Mazda and Staten Island Subaru
- Koeppel Auto Dealership: a group of dealers located in Jackson Heights, Long Island City and Woodside, Queens, including Koeppel Nissan, Inc.; LK Automotive Enterprises, LLC. d/b/a Koeppel Subaru, KL Auto Enterprises LLC. d/b/a Koeppel Mazda and Koeppel Volkswagen, Inc.
- L.I. Autoworld, Inc. d/b/a Generation Kia: located in Bohemia, Long Island
- Nissan 112: located in Patchogue, Long Island
- Huntington Honda, Honda of New Rochelle and New Rochelle Toyota: located on Long Island and in Westchester counties
- Westbury Jeep Dodge and Fiat of Westbury: located in Westbury, Long Island
- Security Auto Sales, Inc. d/b/a Security Dodge: located in Amityville, Long Island
The office is continuing to investigate a number of other New York auto dealers that sold or sell after-sale services without the knowledge and consent of consumers.
Consumers who believe they have been jammed with unwanted products or services in connection with a vehicle lease or purchase or who were sold Credit Forget It’s credit repair or identity theft protection services are urged to file complaints online or call 1-800-771-7755.
