[co-author: Stephanie Kozol]*
New York Attorney General (AG) Letitia James’ office has reached a cumulative total of $3.2 million in settlements with eight Nissan dealerships that the office accuses of overcharging New Yorkers for purchasing leased vehicles at the conclusion of their lease term.
In her announcement of the settlements, James alleged that her office’s investigation found that the dealerships added so-called “junk fees” or falsified the prices of leased vehicles. According to James’ announcement, the settlements, which are commemorated in individual assurances of discontinuance reached between New York and each dealership, impose penalties for overcharging on end-of-lease buyouts and require the dealerships to pay restitution to more than 1,700 consumers.
The AG’s statement indicated that her office’s Consumer Frauds and Protection Bureau opened the investigation that resulted in the settlements in response to consumer complaints that the dealerships were overcharging and providing inaccurate receipts for end-of-lease buyouts after the onset of the COVID-19 pandemic. New York alleges that although the consumers leased Nissan vehicles under agreements that gave them an option to purchase the vehicle for a set amount after the conclusion of the lease term, the dealerships overcharged the consumers by adding miscellaneous “dealership fees” or “administrative fees,” or inflating the vehicle’s price on the invoice.
New York alleged that these practices violated the New York State Motor Vehicle Retail Leasing Act, a regulation issued by the federal Consumer Financial Protection Bureau, false advertising in violation of Section 350 of New York’s General Business Law, deceptive practices in violation of Section 349 of the General Business Law, and fraudulent and illegal conduct in violation of Section 63(12) of New York’s Executive Law.
The dealerships neither admitted nor denied the allegations in each of their settlements.
The settlements involved the following dealerships.
- Action Nissan, in Rockland County, agreed to pay $157,958.59 to 192 consumers and pay a $47,920 penalty.
- Bay Ridge Nissan, in Brooklyn, agreed to pay $23,624 to consumers and pay a $11,960 penalty.
- Garden City Nissan, in Nassau County, agreed to pay $824,013 to 361 consumers and pay a $89,624 penalty.
- Huntington Nissan, in Suffolk County, agreed to pay $426,654 to 275 consumers and pay a $68,750 penalty.
- Legend Nissan, in Syosset, Nassau County, agreed to pay $333,482 to 233 consumers and pay a $20,000 penalty.
- Rockaway Nissan, in Queens, agreed to pay $308,918 to 177 consumers and pay a $44,250 penalty.
- Smithtown Nissan, in Suffolk County, agreed to pay $643,640 to 321 consumers and pay a $80,250 penalty.
- Teddy Nissan, in the Bronx, agreed to pay $108,773 to 156 consumers and pay a $35,560 penalty.
Why It Matters
So-called hidden costs in consumer transactions are an increasing concern of state AGs, especially in the auto-lending industry. To minimize regulatory risk, businesses engaged in auto-lending must keep apprised of state and local regulatory requirements.
*Senior Government Relations Manager
