Two car dealerships located in Long Island, New York announced settlement with state prosecutors after they it was determined the dealerships were selling add on products to customers, which included illegal credit repair and identity theft protection. The dealers were using misleading and deceptive practices to encourage car buyers to sign up for additional services, while charging them upfront, a violation of state and federal law. Additionally, the dealers were including the cost of these add-on’s in the contract price of the vehicle, where by law, any after sale items must be itemized separately so the customer knows the exact sale price of the car itself.
In total, the two dealerships will be required to refund over $118,000 to customers and pay approximately $10,000 in penalties and fines.
Schneiderman’s office has been cracking down on the practice known as “jamming,” in which unscrupulous dealers sell consumers add-on’s they didn’t request or desire, sometimes concealing the sales from consumers or misrepresenting the services as free.
An attorney for Westbury Jeep Chrysler Dodge and Fiat, Stuart Rosenthal of White Plains, said his client sold credit and identity theft services supplied by a vendor, Credit Forget It, which was shut down last year under a consent order with Attorney General Eric T. Schneiderman’s office.
“The dealership believed the product was appropriate and legal, and sold it for what it believed was a fair price to consumers,” he said.