For the third time in the span of about a year, New York attorney general Eric Schneiderman announced a settlement with a dealership regarding either the advertising or the financing practices conducted by the store.

The most recent development is a settlement with Saratoga Springs Nissan, which operated a dealership in Malta, N.Y., under the name Saratoga Springs Nissan from May 2010 to September 2013.  On Sept. 9, 2013, Saratoga Springs Nissan sold the dealership, which is now operated by new owners under the name Lia Nissan of Saratoga.

The settlement requires the former dealer to pay $101,986 in restitution to 119 consumers who were charged illegal fees and/or subjected to a variety of deceptive sales and advertising practices.

Schneiderman’s office explained that its investigation revealed that consumers were charged as much as $5,000 for warranties and service contracts without their authorization and induced to purchase and finance vehicles on terms they could not afford with false promises that the dealership would refinance their loans on more favorable terms after several months. 

Officials indicated restitution amounts range from $198 for illegal fees charged to more than $4,000 for unauthorized warranties and services contracts.  The settlement also requires the business to pay restitution to other consumers who come forward within the next three months and who were subjected to the deceptive and illegal practices uncovered by the investigation with a cap of $50,000.

“A consumer purchasing a car should be able to expect that when they negotiate prices and terms for vehicles, the contracts will accurately reflect those agreements,” Schneiderman said. “This settlement is a victory for New York consumers, and sends the message that car dealerships that take advantage of consumers by conning them into paying more for cars than they had agreed to will be held accountable.

“We will continue working to ensure that car dealerships throughout the state comply with the law,” he continued.

Schneiderman’s office certainly has been busy policing dealerships in the Empire State. Back in April, New York’s top law enforcement agent reached four separate settlements connected with 22 different rooftops in the New York City area for packaging credit repair and identity theft protection services into the vehicle installment contract; a similar practice  landed other Big Apple stores in legal trouble almost a year earlier to the tune of more than $6 million.

The settlement with Saratoga Springs Nissan follows a May 2012 New York State Police raid and seizure of the dealer’s business records, which also resulted in the subsequent arrest and conviction of the dealership’s finance manager, Mark Moore, for second-degree scheme to defraud and third-degree criminal possession of a forged instrument.

Following the raid, Schneiderman’s office indicated that it received a “flood of complaints” from customers of the former dealership, which revealed a pattern of fraudulent, deceptive and illegal practices.

In addition to the practices previously described, the complaints revealed that the dealership had engaged in a variety of “bait and switch tactics,” including:

—Crediting consumers for less than the agreed-upon amount for vehicle trade-ins

—Charging consumers more for vehicles than promised

—Financing consumers’ purchases at higher interest rates than promised

—Executing leases that included a lower yearly mileage limit than promised. 

“A number of consumers also alleged that their signatures had been forged on contract documents,” Schneiderman’s office said.

Involvement in VW settlement

Meanwhile, Schneiderman’s office also highlighted the portion of the settlements Volkswagen reached with federal regulators regarding the diesel vehicle emissions controversy.

The settlements will direct to New York more than $115 million for environmental projects to improve the state’s air quality, as well as more than $30 million in additional monetary recoveries for the state’s general fund.

Schneiderman added that he will continue an investigation into the scope of Volkswagen, Audi and Porsche’s illegal conduct and their liability for environmental penalties.

“The evidence reviewed so far concerning Volkswagen, Audi and Porsche points to a culture of corporate arrogance and conscious disregard for the rule of law and the rights of consumers,” Schneiderman said. “These partial settlements announced today exact a stiff price from Volkswagen for its deception of consumers and the environmental damage it has caused in New York and across the country. 

“But make no mistake: We will continue to investigate and pursue Volkswagen for its violation of our environmental laws, and we will seek the imposition of additional penalties in amounts sufficient to ensure that Volkswagen and any other car manufacturer complies with the standards required of them,” he went on to say.

New York Department of Environmental Conservation commissioner Basil Seggos added, “These partial settlements are a positive step towards addressing Volkswagen’s deliberate so-called ‘clean diesel’ fraud of consumers, and state and federal regulators,”

“New York will continue to hold Volkswagen accountable for its violations of our state’s environmentally protective vehicle emissions regulations,” Seggos said.

A video recap of Schneiderman’s positions on the VW settlement can be viewed in the window at the top of this page or by going here.