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Compliance

N.Y. Regulator Reaches $135K Settlement With Dealer

November 14, 2013

NEW YORK — Attorney General Eric T. Schneiderman’s office reached a settlement yesterday with N.R. Automotive Inc.. The dealership, which was doing business as New Rochelle Toyota, will repay a total of $86,826 to 174 customers who were charged a bogus administrative fee.

New Rochelle Toyota, which was adding a bogus $499 “administrative fee” to the purchase price of used vehicles. No extra services or benefits were provided to customers in return for payment of the fee.

The fee was pre-printed on the dealership’s sales agreement and was located in the price column, near other preprinted fees and taxes consumers are required to pay when purchasing a vehicle. Thus, it appeared to consumers that the “administrative fee” was mandatory and non-negotiable.

"By charging a bogus, illusory administrative fee, New Rochelle Toyota was deceiving its customers and creating an unfair marketplace,"Attorney General Schneiderman said. "My office will continue to monitor this company's business practices, as well as those of other auto dealers, to ensure that they are fair and honest." 

In addition to paying restitution to customers, the dealership also agreed to reform its advertising practices and to pay $50,000 in costs and penalties to the state.

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