Long Island's largest chain of car dealerships, the 22-store Atlantic Auto Group, is paying $310,000 in restitution and penalties to settle state charges of misleading advertising and sales practices in violation of state law and guidelines.
Attorney General Eric Schneiderman planned to announce the settlement with the West Islip-based group Tuesday morning.
Atlantic "persistently defrauded consumers with misleading promotions and fraudulent sales tactics," Schneiderman's announcement said. The attorney general's Nassau and Suffolk regional offices had received more than 250 complaints about the dealerships' advertising and sales practices over several years, the statement said.
"New Yorkers have a right to navigate the car buying process without being targeted by false and misleading promotions and sales practices," Schneiderman said.
In agreeing to the settlement, Atlantic admitted no wrongdoing. A co-owner of Atlantic, Michael Brown, said in an interview that because of a confidentiality agreement, "there's not a lot I can say. But we've got over 2,500 employees here, and it all it takes is one guy not to follow proper protocol and all of a sudden you're exposed."
Schneiderman said that Atlantic hired a company to mail 500,000 promotional items to Long Island consumers from 2012 through 2014 containing scratch-off game cards in which consumers could win a cash prize, a free vehicle, a flat-screen television or an Apple iPad. Schneiderman said consumers were instructed to bring the game card to the dealership.
The cards "had the capacity to mislead consumers to believe that they were guaranteed winners of valuable prizes," Schneiderman said. "In fact, virtually all of the consumers did not win a prize at all."
Brown addressed this charge, saying, "It was a vendor of ours that apparently did not do business the right way. We no longer use that company."
Schneiderman charged that Atlantic also:
Obtained signatures on contracts of sale and financing agreements from consumers who believed that they were filling out paperwork for vehicles they had won in the card promotions.
Published print advertisements in Newsday containing "misleading or illegal features" in violation of state guidelines and after two stores in the group had agreed in February with Schneiderman not to violate those guidelines.
Offered false discounts on vehicles by selling them at a high price that effectively nullified the discount.
Charged for extended warranties, vehicle maintenance contracts and administrative fees that consumers did not want, had no knowledge of or were told they were free.
Provided consumers with blank or partially blank documents for their signatures and later filled out the documents with figures and terms other than what was agreed upon by the consumers.
* Failed to give all necessary documents to consumers at the time of purchase.
Made various false or misleading statements to consumers during high-pressure sales transactions.
Encouraged consumers to apply for loans that they could not afford.
Refused to refund deposits.
In June, Schneiderman's office said 10 other downstate new and used car dealerships, including three on Long Island, were getting notices from his office that he intended to sue them as part of a broad probe into the advertising and marketing of cars and expensive add-ons that can boost prices.
The dealerships included in the settlement to be announced Tuesday are:
Millennium Honda, 286 N. Franklin St., Hempstead
Millennium Toyota, 257 N. Franklin St., Hempstead
Millennium Hyundai, 220 N. Franklin St., Hempstead;
Advantage Hyundai, 440 Plainview Rd., Hicksville;
Advantage Toyota, 400 W. Sunrise Hwy., Valley Stream;
Advantage Honda, 1260 Northern Blvd., Manhasset;
Atlantic Volkswagen, 555 Sunrise Hwy., West Islip;
Atlantic Audi, 251 Sunrise Hwy., West Islip;
Atlantic Nissan, 193 Sunrise Hwy. North Service Rd., West Islip;
Atlantic Hyundai, 193 Sunrise Hwy. North Service Rd., West Islip;
Atlantic Chrysler Jeep Dodge Ram, 130 Sunrise Hwy., West Islip;
Atlantic Toyota, 200 Sunrise Hwy., Amityville;
Atlantic Chevrolet Cadillac, 1350 Sunrise Hwy., Bay Shore;
Atlantic Honda, 1391 Sunrise Hwy., Bay Shore;
Lexus of Rockville Centre, 700 Sunrise Hwy., Rockville Centre;
Lexus of Massapequa, 4950 Sunrise Hwy., Massapequa Park;
Audi of Lynbrook, 843 Sunrise Hwy., Lynbrook;
Huntington Chevrolet, 370 Oakwood Rd., Huntington Station;
Huntington Toyota, 1030 E. Jericho Tpke., Huntington Station;
Mid-Island Hyundai, 1815 Middle Country Rd., Centereach;
South Shore Hyundai, 360 W. Sunrise Hwy., Valley Stream; and
Massapequa Nissan, 3660 Sunrise Hwy., Seaford