Attorney General Eric Schneiderman announced today that his office reached a $135,000 settlement with New Rochelle Toyota (N.R. Automotive Inc.) over a bogus fee the auto dealer was charging to customers.
The company was charging buyers of pre-owned vehicles a $499 “administrative fee” in addition to the purchase price of the car without providing any extra services or benefits, according to Schneiderman.
“By charging a bogus, illusory administrative fee, New Rochelle Toyota was deceiving its customers and creating an unfair marketplace,” Schneiderman said in a statement. “My office will continue to monitor this company’s business practices, as well as those of other auto dealers, to ensure that they are fair and honest.”
The settlement terms are that New Rochelle Toyota will repay a total of $86,826 to 174 customers who were charged the bogus fee. The dealership has agreed to change its advertising practices and to pay $50,000 in costs and penalties to the state.
The attorney general’s office said the company, located at 47 Cedar St., added the $499 fee to used cars sold between Jan. 1 and July 31, 2012. The charge was pre-printed in the price column on the sales agreement, near other pre-printed fees and taxes consumers pay when purchasing a vehicle. Because of that, it appeared to consumers that the charge was mandatory and non-negotiable.
Schneiderman’s office also found that New Rochelle Toyota “repeatedly engaged in false and deceptive advertising, such as fine print and footnotes that contradicted the principal message of the advertisements; advertised sales without specifying the vehicles which were being offered at reduced prices, and advertising leased vehicles for ‘$0 Down’ without disclosing that payments were actually due at the inception of the lease.” The company claimed it had an “A+” rating from the Better Business Bureau, but the rating is actually an “F”.