Former N.Y. Nissan dealer to repay customers nearly $102,000 for illegal fees, fraud

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Eric Schneiderman: “A consumer … should be able to expect that when they negotiate prices and terms for vehicles, the contracts will accurately reflect those agreements.” Photo credit: Reuters

A former New York dealer has agreed to pay $101,986 in restitution to 119 consumers for charging them illegal fees and employing deceptive sales and advertising tactics, New York Attorney General Eric Schneiderman said.

The owner sold the dealership, Saratoga Springs Nissan in Malta, N.Y., in 2013. The dealership has a different name under the new ownership, according to a statement from the attorney general’s office last week.

Saratoga Nissan charged its customers as much as $5,000 for warranties and service contracts without their permission, the statement said. Dealership personnel also encouraged customers to buy and finance vehicles they could not afford, falsely promising them that the dealership would refinance their loans after several months.

The settlement orders the former dealer, who was not identified in the attorney general’s office statement, to pay customers restitution amounts ranging from $198 for illegal fees to more than $4,000 for issuing unauthorized warranties and service contracts. The dealer must also pay restitution, capped at $50,000, to customers who in the next three months claim the dealership deceived them with the illegal practices the attorney general’s office identified.

“A consumer purchasing a car should be able to expect that when they negotiate prices and terms for vehicles, the contracts will accurately reflect those agreements,” Schneiderman said in the statement.

Police raid

In May 2012, the New York State Police raided Saratoga Springs Nissan and seized its business records, the statement said. The police also arrested the finance manager, Mark Moore, who later was convicted of second-degree scheme to defraud and third-degree criminal possession of a forged instrument.

After the raid, customers of the dealership sent the attorney general’s office “a flood of complaints” about deceptive sales and advertising tactics.

Customers complained of bait-and-switch tactics, saying the dealership credited them for less than the amount agreed upon for vehicle trade-ins, charged more on vehicles than promised, financed them at a higher interest rate than promised and financed leases at a lower annual mileage cap than promised.

Some consumers also said their signatures were forged on contracts.

“This settlement is a victory for New York consumers and sends the message that car dealerships that take advantage of consumers by conning them into paying more for cars than they had agreed to will be held accountable,” Schneiderman said. “We will continue working to ensure that car dealerships throughout the state comply with the law.”

Recent settlements

In April, Scheiderman’s office announced four settlements with dealerships over the illegal sale of credit-repair and identity-theft protection. The dealerships agreed to pay up to $800,000 in restitution and $64,000 in penalties.

The actions are part of Schneiderman’s efforts to stop dealers from charging customers for services without their knowledge or consent. In January, his office announced similar settlements with three New York dealerships. In June 2015, the attorney general’s office announced multimillion-dollar settlements with four New York dealerships for selling illegal credit repair and identity protection.

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Former N.Y. Nissan dealer to repay customers nearly $102,000 for illegal fees, fraud