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Customers Misled With Rent-to-Own Scheme

December 23, 2004

ALBANY, N.Y. -- Two unlicensed auto dealers in New York were ordered to sign over titles to more than 30 vehicles to the customers without requiring further payments. Justice Frederick Marshall of the State Supreme Court in Chautauqua County, N.Y., found that the dealers misled consumers into thinking they were buying vehicles that were actually being leased.

Kevin Smith and Jay Shaffer ran a used-car dealership and repair shop called Auto Store in Jamestown, N.Y., and Ellicott, N.Y. The lawsuit filed last summer said they substituted lease documents for sales documents. Over 30 customers complained that they couldn't obtain their vehicle titles after signing what they thought were rent-to-own contracts.

Along with transfering the vehicle titles, worth at least $50,000, Smith and Shaffer must pay $100,000 into a restitution fund for consumers. The court order also says they can't collect $80,000 in auto repairs they claim customers owe them, because they didn't get a repair shop license from the Department of Motor Vehicles.

In June, Smith and Shaffer pled guilt to five felonies related to Auto Store operations. The criminal case resulted in a two- to six-year prison sentence for Smith and nine months for Shaffer.

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