New York State Attorney General Eric Schneiderman announced that Honda of New Rochelle and New Rochelle Toyota are facing severe restrictions on sales after being included in a deal to end the practice of “jamming,” which involves charging consumers for hidden purchases.
According to Schneiderman, SG Hylan Motors Corp. and Best Auto Outlet, Inc. - which own and operate multiple dealerships in the tri-state area - illegally sold “after-sale” products and services, including credit repair and identity theft protection services to more than 2,300 consumers, sometimes at a cost of up to $2,000 per consumer.
In total, the two companies must pay more than $1.5 million in restitution to former consumers. The payment will be put into a fund to be distributed to those consumers. The two companies are also paying more than $100,000 in penalties.
Under the terms of the settlement, New Rochelle Toyota and Honda of New Rochelle are now prohibited from selling or offering marketing credit repair and identity theft services in connection to the sale of a vehicle. They cannot misrepresent the price of a vehicle in sale contracts or sell any after-sale products.
Schneiderman said the settlements are “part of (his) initiative to end the practice that automobile dealers call ‘jamming.’” Since 2015, Schneiderman has settled deals with 11 dealerships and collected more than $17 million in restitution and penalties. The Attorney General noted that his office is actively investigating several other New York auto dealers that sold or are selling after-sale services without the knowledge or consent of consumers.
“When consumers shop for a car, they deserve an honest and fair negotiation – and not to be misled by deceptive dealerships looking to saddle customers with hidden costs,” Schneiderman said. “My office will continue to investigate and hold accountable any auto dealers trying to pad their pockets by charging fees for undisclosed products and services that consumers do not need and did not ask for.”
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