New York AG Announces $14 Million Settlement In Car Dealership Crackdown
NEW YORK (CBSNewYork) -- New York State Attorney General Eric T. Schneiderman is cracking down on some deceptive practices by local car dealerships.
Motorists thought they were getting a deal when they purchased their cars at Paragon dealerships in Queens and White Plains, but the state attorney general's office said they were getting ripped off instead.
Schneiderman announced that nearly $14 million in restitution will go to 15,000 consumers who unwittingly paid for add-ons such as credit repair and identity theft prevention services and other hidden costs, including tire protection or lo-jack.
Attorney General Cracks Down On New York Delearships
The practice, described as jamming, can add more than $2,000 in hidden costs and fees to the price of a new or leased vehicle.
"When consumers shop for a car, they deserve to be dealt with honestly and fairly – and not to be misled by auto dealers who use deceptive tactics to fleece their own customers," Schneiderman said in a statement. "New York consumers must beware: Car dealerships sometimes pad their pockets by charging for worthless after-sale items, which inflate the price of their car. These items are often ones that consumers don't need, did not ask for and often are not even told about. Businesses need to make a profit to survive, but it's illegal to do so by duping consumers."
In a statement Wednesday, a Paragon spokesperson said in part "The settlement with the Attorney General acknowledges no admission of wrongdoing or liability by the settling dealerships. Paragon dealerships stopped offering CFI credit services to customers in early 2014. We appreciate the Attorney General's office bringing the matter to our attention and working with us to create a positive outcome for our customers."
For the full statement from Paragon, click here.
Generation Kia in Suffolk County agreed to reimburse $36,000 to more than two dozen customers for add-ons, 1010 WINS' Juliet Papa reported.
Schneiderman is investigation 11 other dealerships in Staten Island, Brooklyn, Westchester and Long Island for similar practices.
