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Post date: December 13 2001

Westchester Car Dealer Cited For False Advertising

State Attorney General Spitzer today announced a settlement with a Westchester auto dealer that engaged in a series of deceptive business practices, including failing to honor advertised prices and failing to refund deposits.

"This dealership took advantage of consumers at every step of the car-buying process," Spitzer said. "Its most egregious act, however, was refusing to refund car deposits, thereby forcing consumers to choose between a bad deal for a car or the loss of a deposit worth hundreds of dollars."

Consumers were lured into New Rochelle Toyota's showroom with advertisements that promoted extremely low prices. The dealership, however, failed to clearly disclose in its ads that its prices were subject to financing through the dealership at high interest rates.

After expressing interest in a particular vehicle, consumers were pressured to leave a deposit for a vehicle while a credit check was done. When consumers - including undercover investigators from Spitzer's office - later learned of the costly financing offered with the advertised price, they attempted to cancel the deal and often were refused a refund of their deposit, in violation of state law.

Other consumers were told that "prep" fees would be deducted from the deposit if they cancelled the purchase. Still others were told that they would receive their money back within ten days, but they never did.

The 15-month investigation culminated with New Rochelle Toyota agreeing to pay more than $88,000 to settle the case, including: at least $32,000 in refunds to 125 consumers in addition to the $11,550 in refunds the dealership made during the course of the Attorney General's investigation; $40,000 in civil penalties; and $5,000 in costs.

The dealership also is forced to turn over proof that an additional 65 deposits worth over $64,000 resulted in a sale. If proof is not forthcoming, the dealership will be required to pay refunds on those deposits as well.

The dealership has also agreed to a series of reforms of its business practices, including honoring advertised prices and promptly refunding deposits.

In addition to other restitution, New Rochelle Toyota agreed to pay refunds to consumers who come forward within ninety days with valid complaints against the dealership related to the terms of the settlement. Individuals wishing to do so are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.

This case was handled by Assistant Attorney General Doris K. Morin and Assistant Attorney General In Charge Gary Brown of the Westchester Regional Office, and Investigators Brenda Blasie, Milton Branch, and Georgia Nurse. Robert Menak and Ian Hay of the Department of Motor Vehicles provided assistance in the investigation.