NY auto dealers to pay $14 million for selling illegal services

Reuters News
Posted: Jun 17, 2015 12:21 PM

NEW YORK (Reuters) - Three New York auto dealers have agreed to pay nearly $14 million to customers who were unlawfully sold credit repair, identity theft protection and other services along with their vehicles, state officials said on Wednesday.

Some 15,000 customers of the jointly owned Paragon Honda in Woodside, Paragon Acura and White Plains Honda, located in New York City and neighboring Westchester County, will receive restitution payments as part of the settlement reached with New York Attorney General Eric Schneiderman.

"When consumers shop for a car, they deserve to be dealt with honestly and fairly – and not to be misled by auto dealers who use deceptive tactics to fleece their own customers,” Schneiderman said in a statement.

He also announced that he planned to sue an additional 11 auto dealerships in and near New York City that are accused of similar fraudulent activities.

Schneiderman said the dealers used deceptive tactics to push services, which were often unnecessary, onto customers that they were not authorized to provide as a way to inflate car prices.

Brian Benstock, general manager of all three named dealerships, said his staff was offering services through a contractor that they believed to be lawful. Upon learning from Schneiderman's office that they were unauthorized to sell the services, they ceased doing so, Benstock said.

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The lawsuits are part of a wider plan by Schneiderman's office to take aim at auto dealerships unlawfully selling credit repair and identity protection services that are often hidden into other fees or misrepresented when sold.

(Reporting by Laila Kearney; Editing by Bill Trott)