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Post date: November 13 2013

A.G. Schneiderman Announces $135k Settlement With Westchester Auto Dealer Over Bogus Fee To Customers

New Rochelle Toyota Charged Purchasers Of Pre-Owned Vehicles A $499 “Administrative Fee” In Addition To The Purchase Price Of The Vehicle Without Providing Extra Services Or Benefits

Schneiderman: My Office Is Committed To Stopping Deceptive Auto Dealer Practices

NEW YORK - Attorney General Eric T. Schneiderman announced today that his office has reached a settlement with Westchester auto dealer N.R. Automotive, Inc., d/b/a New Rochelle Toyota, which was adding a bogus $499 “administrative fee” to the purchase price of used vehicles. No extra services or benefits were provided to customers in return for payment of the fee.

"By charging a bogus, illusory administrative fee, New Rochelle Toyota was deceiving its customers and creating an unfair marketplace," Attorney General Schneiderman said. "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." 

Pursuant to the settlement, New Rochelle Toyota will repay a total of $86,826 to 174 customers who were charged the bogus administrative fee. The dealership has also agreed to reform its advertising practices and to pay $50,000 in costs and penalties to the state.

Between January 1, 2012, and July 31, 2012, New Rochelle Toyota, located at 47 Cedar Street, added a $499 “administrative fee” to the purchase price of used vehicles. The fee was pre-printed on the sales agreement used by the dealership and was located in the price column, near other pre-printed fees and taxes that consumers are required to pay when purchasing a vehicle. Thus, it appeared to consumers that the “administrative fee” was mandatory and non-negotiable.

However, the “administrative fee” was not a mandatory charge and was simply tacked onto the negotiated purchase price of the vehicle. 

The Attorney General’s investigation also revealed 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. New Rochelle Toyota also falsely claimed that is has an “A+” rating from the Better Business Bureau, when its rating is actually an “F.” 

The case was handled by Assistant Attorney General Sandra Giorno-Tocco under the supervision of Gary Brown, Assistant Attorney General-in-Charge of the Westchester Regional Office, and Martin J. Mack, Executive Deputy Attorney General for Regional Affairs.

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