New Jersey has filed a consumer fraud suit against the auto leasing and financing subsidiary of the Bank of America Corporation, the state attorney general's office said on March 22.

The suit, filed in state Superior Court in Newark, claims that the Banc of America Auto Finance Corporation, based in Brea, Calif., overcharged customers for "excessive wear and tear" on leased vehicles and billed for damages months after the cars had been returned -- in some cases even after the vehicles had been resold.

State officials also allege the unit withheld security deposits and denied lessees the chance to contest the charges and obtain an independent appraisal.

The company, created as the successor to Nationsbanc Auto Leasing Inc. when the two parent banks merged in 1998, declined to comment on the allegations.

The state's civil complaint alleges 72 offenses dating back to 1996, many involving sums exceeding $1,000. Under New Jersey law, those found guilty of fraud can be fined up to $7,500 per offense.

Mark Herr, director of the State Division of Consumer Affairs, said that one-third of all new vehicles in New Jersey are leased rather than purchased. Of those, nearly one-third face substantial charges when returned, he said, citing an industry estimate of $1,647 in average charges.

"In many cases, consumers were billed for damages they say they did not cause," Herr added.

Some of the consumers covered by the New Jersey lawuit have records and photographs to back up that claim.

Herr referred specifically to a case in which a West New York, N.J., man returned a 1996 Honda Accord LX to the leasing dealership on June 20, 1999, and obtained an inspection report from the Honda dealer who leased the car to him, stating that the car had no damage.

More than two months later, however, Banc of America Auto Finance Corporation allegedly informed him that its own inspection had uncovered excessive wear and damages amounting to $1,668. When the man contested the claim, his account was referred to a collection agency, according to Herr.

"Banc of America was required by law to send a bill to the consumer within 10 days of the vehicle's return, give him an opportunity to contest the charges, and hire an independent appraiser," Herr said. "Who knows what happened to the vehicle while it sat on the dealer's lot for two months?"

Bank of America declined to comment on the suit. "It is our policy not to comment on matters in litigation," spokesman George Owen said.

This is New Jersey's third case in less than a year involving lease-end transactions, and more are coming, according to Herr. In July 2000, the state sued American Honda Finance Corporation, the Japanese carmaker's leasing arm, and followed that last month by suing Chase Manhattan Bank. Those cases are pending, said Genene Morris, a Consumer Affairs spokeswoman. All three cases involve similar charges.