NEW YORK -

After taking a trio of actions involving more than two dozen dealerships in the span of about a year, New York attorney general Eric Schneiderman wielded his enforcement powers again this week in association with F&I activities.

Schneiderman announced a $298,000 settlement with Nissan of New Rochelle for what the Empire State’s top law enforcement agent said was deceptively charging hundreds of consumers for an “unwanted and bogus anti-theft product that cost up to thousands of dollars per consumer.”

The New York AG asserted this after-sale product often was added onto the final cost of the vehicle without the consumer’s knowledge or consent, after the customer had agreed upon the purchase price of a vehicle but before the installment contract was finalized.

Following a consumer complaint in August 2015 that Nissan of New Rochelle had fraudulently sold an after-sale product, the office commenced an investigation into the dealership’s practices. The investigation found that Nissan of New Rochelle sold hundreds of consumers a product called Total Loss Protection, which was meant to serve as a theft deterrent. 

The investigation noted that consumers were charged amounts ranging from $215 to over $5,000. In many instances, Nissan of New Rochelle added this fee onto the final sales price without the knowledge or consent of the consumers. As a result, the final price paid by the consumers was inflated by the amount charged for the after-sale product.

Furthermore, officials determined Nissan of New Rochelle failed to clearly disclose the nature of the after-sale product to its customers. The “Total Loss Protection” or “Total Loss Protection Guarantee” product was advertised as a permanent etch or engraving of the vehicle’s VIN, or a registered serial number, on the windows of the vehicle — supposedly to deter theft. However, officials indicated Nissan of New Rochelle did not actually etch the VIN onto the windows of the vehicles.

Instead, for some vehicles, the attorney general’s office found the dealership placed sticker decals with assigned registration numbers on the inside of the door or door-jamb where no one could see them, thus having no deterrent effect. For other vehicles, the dealership did not even provide stickers or decals, according to the investigation.

New York officials went on to mention consumers were also led to believe that there would be a guaranteed credit up to either $3,000 or $5,000 toward the purchase of a new vehicle should their car be stolen. However, there were numerous conditions and limitations — such as that the credit would not be applied if it eliminated the dealership’s profit on the sale — which rendered the “credit” illusory, according to officials.

The AG’s office added that only one consumer ever received a credit through the Total Loss Protection program.

Under the agreement, Nissan of New Rochelle will refund $276,127 to 298 consumers who were charged an add-on fee for the Total Loss Protection product. In addition to restitution, the dealership will also pay $22,084 in penalties, fees, and costs to the State. The dealership has also agreed to certain reforms to its sales practices, including:

—Fully disclosing that any and all after-sale services or products are optional and that the price is negotiable

—Clearly explaining to each consumer any and all after-sale services or products being offered by the dealership

—Only adding an after-sale service or product to the final bill with the knowledge and full consent of the consumer

“Consumers should not have to worry that they are being scammed into adding on bogus products and services when they purchase a car,” Schneiderman said.

“Buying a car is already a major investment for many families, and tacking on thousands of dollars extra can become a significant financial burden,” he continued. I am pleased that we are able to return hundreds of thousands of dollars in restitution to the nearly 300 consumers who were scammed and defrauded.”

Last summer, a stretch of actions by Schneiderman concluded with a settlement involving another Nissan store. Lia Nissan of Saratoga was required 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