QUEENS, N.Y. — New York Attorney General Barbara D. Underwood announced on June 15 a settlement resolving an investigation of Nemet Hyundai, Nemet Kia, Nemet Nissan, and Nemet Motors, a family of auto dealers located in Queens. Previously occupied by Eric T. Schneiderman, the attorney general's office opened an investigation of the dealerships after receiving dozens of complaints from consumers about unwanted charges, fraudulent sales tactics, and other deceptive maneuvers that misled New Yorkers about the products for which they were paying.
In the settlement, the state obtained restitution for New Yorkers harmed by the dealerships’ fraudulent business practices, a requirement that the dealerships cease illegal and deceptive activity, and civil penalties for the alleged deceptive acts. Under the terms of the settlement, affected New Yorkers have until July 30 to file a complaint in order to be eligible for a refund.
“We have zero tolerance for those who seek to defraud New York consumers,” said Attorney General Underwood. “This settlement ensures impacted consumers will get the restitution they deserve and put an end to the dealerships’ deceptive practices.”
One plaintiff, Shauntel Wilson of Kings County, bought a car from Nemet after a manager promised to refinance her loan in six months, dropping her monthly payments from an unaffordable $781 to $548. Wilson complained when Nemet failed to deliver the promised refinancing and the AG found that Nemet had secured Wilson’s unaffordable loan by inflating her income on a credit application by nearly $15,000 per year. On top of that, Nemet slipped $2,600 worth of undisclosed aftermarket products into her contract.
The AG alleges that the dealerships engaged in a number of deceptive practices, including:
• Adding unwanted aftermarket items into consumers’ contracts without disclosing the items or their costs to consumers, without obtaining the consumers’ consent, or by misrepresenting that the items were required by the finance source.
• Preventing consumers from having an adequate opportunity to review their contracts by making them wait for inordinate periods of time, then rushing them through signing their contracts.
• Misrepresenting their willingness and ability to refinance consumers’ loans by making fraudulent promises to refinance the loans at specific future dates for particular interest rates.
• Submitting falsified credit applications with inflated income information for applicants, ultimately obtaining loans the dealerships' customers were unable to pay.
Under the settlement, the Nemet dealerships will refund $108,231 to 22 known consumers. In addition to restitution, the dealerships will also pay $56,250 in penalties to New York State. The dealerships’ management has agreed to modify their employee training and to hire an outside monitor for at least three years to ensure compliance with the settlement terms.
Originally posted on F&I and Showroom