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New Rochelle Honda and New Rochelle Toyota Cited for Deceptive Practices, Inflating Car Prices, Ripping Off Consumers

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New Rochelle Honda and New Rochelle Toyota Cited for Deceptive Practices, Inflating Car Prices, Ripping Off Consumers

April 22, 2016 - 13:39
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NEW YORK—Attorney General Eric T. Schneiderman today announced four separate settlements with auto dealers that return nearly $2 million in restitution to nearly 5,000 consumers and $174,000 in penalties and costs to the state for selling “after-sale” products. 

Among the dealerships are Huntington Honda which owns two dealerships in New Rochelle, Honda of New Rochelle and New Rochelle Toyota.

Huntington Honda fleeced 475 consumers out of $270,950 and has agreed to make restitution for that amount and in addition will pay $30,000 in penalties, said Schneiderman.

The AG is merely confirming what New Rochelle residents have known for years.

Since 2010, Talk of the Sound has written about the despicable business practices of Honda of New Rochelle (see related articles below).

Residents who live near the dealership have complained often about Honda of New Rochelle cutting down City-owned tress, failing to comply with City Code, test drives on local streets, illegal parking, and blocking roads, including Route 1 and the Palmer Avenue bridge with illegally parked car carriers and illegally storing vehicles at locations throughout New Rochelle. Customers have complained about high-pressure sales tactics and now through this settlement agreement admitting they have been ripping off customers for years.

“Consumers deserve to be treated honestly by car dealerships, and shouldn’t be hit with hidden fees that inflate the price of the vehicle,” Attorney General Schneiderman said. “My office will continue to make it a priority to crackdown on these deceptive business practices that target unsuspecting consumers.”

These settlements are part of the Attorney General’s wider initiative to end the practice engaged in by many dealers of “jamming,” or unlawfully charging consumers without their consent or knowledge for purchases. 

Last year, as part of the wider investigation, Attorney General Schneiderman obtained a consent order that shut down Credit Forget, Inc. (CFI), a New York company that sold the unlawful credit repair and identity theft protection services to these and other car dealerships. 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, and contracts that violate the law are void.

The Attorney General’s investigation found that, between 2010 and 2015, these dealers used fraudulent, deceptive, and illegal methods to sell CFI contracts to approximately 5,000 consumers. 

Typically, after working with a salesperson to choose a car, the consumer met with a “Finance & Insurance Manager” who would try to sell the consumer additional “after sale” products such as extended service contracts, key replacement services, a security system, credit repair services and identity theft protection services.  Often, these after sale items added hundreds or thousands of dollars in hidden charges to the sale or lease price of a vehicle.  The costs of these items were often bundled into the vehicle sale price and not separately itemized.  The investigation showed that for some dealers consumers were totally unaware that they had received these services.  In many other cases, consumers thought that the services were free.  As a result, often unbeknownst to the consumer, the price of the car stated on purchase and lease documents was inflated by the amount of these after-sale items.

The dealerships also included Koeppel Auto Group, Plaza Dealerships and Manfredi Auto Group. They have locations in Staten Island, Brooklyn, Queens, Long Island and Westchester. The Attorney General charged the dealerships with unlawfully selling “after-sale” products and services, including credit repair and identity theft protection services, that often added thousands of dollars to the purchase price of the vehicle. 

The dealerships failed to provide required disclosures such as consumers’ rights to cancel the credit repair services contract.  In addition, when the negotiations were conducted in a language other than English, the Koeppel dealerships provided sales documents only in English and not in the language in which the negotiations were conducted.  As part of the settlement, Koeppel must provide a translation of certain material documents in the language in which the terms were negotiated before the consumer signs these documents.

The settlements prohibit the dealerships from:

  • Selling, offering to sell or marketing credit repair and identity theft services in connection with the sale or lease of a vehicle;
  • Selling, offering for sale, or providing to consumers any after-sale product or service unless, prior to such sale, certain material terms, including price, are disclosed verbally and in writing;
  • Misrepresenting the price of the vehicle in final lease or sale contracts;
  • Failing to provide consumers with sales or lease agreements that clearly and conspicuously itemize each after-sale product or service and its price.

The dealer groups included among today’s settlements are:

Brooklyn

PLAZA: 1600 consumers, $800,000 restitution, $64,000 penalties

  •  Plaza Oldsmobile, Ltd. d/b/a Plaza Toyota-Plaza Scion (2721 Nostrand Ave.)
  •  Plaza Hyundai, Ltd. (2740 Nostrand Ave.)
  •  Plaza Motors of Brooklyn, Inc. d/b/a Plaza Honda (2740 Nostrand Ave.) and
  •  Crystal Bay Imports, Ltd. d/b/a Acura of Brooklyn, Inc. (2751 Nostrand Ave.)

Staten Island

MANFREDI: 1,497 consumers, $425,000 restitution, $30,000 penalties

  •  Manfredi Auto Group LLC d/b/a Manfredi Fiat and Fiat of SI (1605    Hylan Blvd.)
  •  Manfredi Auto LLC d/b/a Manfredi Mitsubishi (1581 Hylan Blvd.)
  •  Manfredi Auto Mall, Inc. d/b/a Manfredi Kia (1581 Hylan Blvd.)
  •  Manfredi Cadillac, Inc. d/b/a Manfredi Hyundai (1590 Hylan Blvd.)
  •  Manfredi Chevrolet, L.L.C., d/b/a Manfredi Cadillac (2519 Hylan Blvd.)
  •  Manfredi Chrysler Jeep & Dodge of Staten Island LLC (1239 Hylan Blvd.) Manfredi Chrysler, Jeep & Dodge, L.L.C. (1239 Hylan Blvd.)
  •  Manfredi Fiat Inc. (1605 Hylan Blvd.)
  •  Manfredi Motors Inc. d/b/a S.I. Toyota, Manfredi Toyota and Manfredi Scion (1591 Hylan Blvd)
  •  Manfredi Subaru, LLC.  (1257 Hylan Blvd.) 
  •  SI Safe Auto, LLC d/b/a Manfredi Mazda (1580 Hylan Blvd.) 
  •  Staten Island Motors, Inc., d/b/a Staten Island Subaru (1257 Hylan Blvd.) 

Queens

KOEPPEL: 1,361 consumers, $500,000 restitution, $50,000 penalties

  •  Koeppel Nissan, Inc. (74-15 Northern Boulevard, Jackson Heights).
  •  LK Automotive Enterprises, LLC. d/b/a Koeppel Subaru (42-01 N. Blvd., L.I.C.)
  •  KL Auto Enterprises LLC. d/b/a Koeppel Mazda, (57-01 N. Blvd., Woodside), and
  •  Koeppel Volkswagen, Inc. (57-15 N. Blvd., Woodside)

 

Long Island / Westchester

HUNTINGTON HONDA: 475 consumers, $270,950 restitution, $30,000 penalties

  •  Huntington Honda Inc. (1055 E. Jericho Turnpike, Westbury)
  •  Westchester Autoplex, Inc. d/b/a Honda of New Rochelle (25 East Main Street, New Rochelle)
  •  Automotive, Inc. d/b/a New Rochelle Toyota (47 Cedar Street, New Rochelle)

In June 2015, the Attorney General reached a similar agreement with the Paragon dealerships, located in New York City and Westchester that required Paragon to pay $6 million into a restitution fund administered by a third-party administrator that was distributed to 13,582 Paragon consumers who received the CFI contracts.  Paragon also paid $325,000 in penalties, costs and fees. In addition, previous settlements were reached with four other dealer groups providing for $233,000 in restitution to 1,238 consumers and $36,000 in penalties and costs.

Consumers who believe they have been jammed with unwanted products or services or who were sold CFI’s credit repair or identity theft protection services by a car dealership are urged to file complaints online or call 1-800-771-7755.

These cases were handled by Assistant Attorneys General Elena González, Herbert Israel, Noah Popp and Special Assistant Attorney General Stephen Mindell, Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, all in the Consumer Frauds & Protection Bureau.

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