Ten downstate new and used car dealerships, including three on Long Island, are getting notices from State Attorney General Eric T. Schneiderman that he intends to sue them as part of a broad probe into the advertising and marketing of cars and expensive add-ons that can boost prices.
An announcement due to be released Wednesday says the local dealerships receiving notices include Huntington Honda, at 1055 E. Jericho Tpke.; Nissan of Huntington, at 850 East Jericho Tpke., Huntington Station; and Volkswagen of Huntington, at 838 East Jericho Tpke., Huntington Station.
Specific charges against the dealerships weren't disclosed Tuesday. Nissan of Huntington deferred comment late Tuesday to its attorney, who couldn't immediately be reached. There was no immediate comment from Huntington Honda. An executive at Volkswagen of Huntington, who declined to identify himself, refused comment.
Schneiderman also planned Wednesday to announce settlements with three other downstate car dealerships, including Paragon Honda and Paragon Acura in Queens and White Plains Honda, of allegations related to the disclosure of add-ons and their costs, especially credit repair and identity theft protection.
Several months ago, Schneiderman reached a similar agreement with a Bohemia dealership, Generation Kia at 4825 Sunrise Hwy., which paid about $41,800 in fines and restitution to customers. Schneiderman's office said Generation Kia sold Credit Forget It services, a 36-month credit repair, restoration and identity theft plan, without legally required disclosures, including costs.
Under its agreement with the state, the dealership has made $16,000 in reimbursements to 24 consumers related to the Credit Forget It contracts, Schneiderman's office said. In addition, the company paid more than $20,000 in restitution to a dozen other consumers who allegedly were subjected to deceptive business practices, the office said.
Schneiderman said some customers were not allowed to review sales and financing documents before signing them, as required by law.
In some cases, neither the prices nor the specifics of Credit Forget It contracts were stipulated, also required by law, Schneiderman said. It also is illegal to charge for the service up front, the attorney general said.
The attorney general said his investigation began after "several" consumer complaints about activities between Jan. 1, 2013, and March 1 of last year. There was no immediate comment from the dealership or its attorney.
"New York consumers must beware," Schneiderman said in a statement. "Car dealerships sometimes pad their pockets by charging for worthless after-sale items, which inflate the price of their car."
"These items are often ones that consumers don't need, did not ask for and often are not even told about," Schneiderman said.
The Paragon Honda, Paragon Acura and White Plains Honda agreements will return a total of more than $13.5 million in restitution to 15,000 consumers for add-ons that in some cases added more than $2,000 in hidden costs and fees on the sale or lease price of a vehicle.
The Paragon dealerships will also pay $325,000 in penalties, fees and costs to New York State.
Other dealerships receiving intent to sue notices include: Honda of New Rochelle, Staten Island Honda, Staten Island Nissan; Plaza Honda, Plaza Hyundai and Plaza Toyota, all of Brooklyn; Queensboro Toyota, and Potamkin Hyundai.