Larchmont Auto Dealer Bilked Customers On Security System: AG
LARCHMONT, NY — A Larchmont automobile dealer is the subject of a court order that prevents it from illegally overcharging customers for bogus theft protection products. State Attorney General Barbara Underwood announced Wednesday that a court order has been issued that permanently keep Victory Motors LLC, doing business as Victory Mitsubishi of Larchmont, and Victory Auto Group LLC, dba Victory Suzuki of the Bronx, from engaging in persistent fraudulent, deceptive and illegal business practices in the sale of a passive security system.
The order requires the dealerships to pay restitution, damages and civil penalties.
A lawsuit was filed by the attorney general in Dec. 2017 alleging that the car dealerships deceptively charges as many as 1,100 consumers for an unwanted and bogus anti-theft product that cost up to $4,000 per customer.
Known as an “after-sale” product, this item was often added onto the final cost of the vehicle without the customer’s knowledge or consent — after he or she had agreed upon the purchase price of a car but before the sale transaction was finalized.
Underwood said the court order was a victory for New Yorkers who were ripped off by these car dealers.
“The dealership’s deceptive conduct led consumers to sign contracts that did not reflect the negotiated sale terms, frequently including unwanted aftermarket add-ons that they did not agree to,” she said.
“My office will continue to protect New York’s consumers and ensure that car dealerships comply with state law,” Underwood said.
In April 2015, the Attorney General received a complaint from a consumer who, after purchasing a vehicle from Victory Mitsubishi in Larchmont, noticed that there was a puzzling charge of $1,995 labeled “Etch” on the bill of sale. When contacted by the attorney general’s office, the dealership explained that the charge was for a glass etch product — a security add-on in which a serial number, often the vehicle identification number (“VIN”), is etched onto each of the vehicle’s windows. However, the consumer said that she had not been made aware by the dealership that she was purchasing the etch product, and that if she had been made aware, she would have declined to purchase it. After the attorney general’s inquiry, the dealership made a full refund.
Concerned that other consumers could have been charged for the product without their knowledge or consent, the attorney general’s office then launched an investigation that found both Victory Mitsubishi of Larchmont and Victory Suzuki of the Bronx — another dealership with common ownership — had charged as many as 1,100 consumers for a product called the Etch Guarantee.
Consumers were charged amounts ranging from $129 to $3,998. In many instances, the two Victory dealerships added this fee onto the final sales price without the knowledge or consent of the consumers. As a result, the final price paid by the consumers was inflated by the amount charged for the after-sale product.
The two Victory dealerships also failed to clearly disclose the nature of the after-sale product to their customers. The “Vehicle Replacement Discount Allowance,” also known as the “Etch Guarantee,” is supposed to include a permanent etch or engraving of the vehicle’s VIN on the windows of the vehicle — supposedly to deter theft. However, in many instances, the Victory dealerships did not actually etch the VIN onto the windows of the vehicles.
Consumers were also led to believe that there would be a guaranteed credit of up to either $2,500 or $5,000 toward the purchase of a new vehicle should their car be stolen. However, there were numerous conditions and limitations — such as that the credit would not be applied if it eliminated the dealership’s profit on the sale — which rendered the “credit” illusory.
In December 2017, the attorney general’s office filed a lawsuit against both Victory dealerships because they failed to offer full refunds to the 1,100 consumers who had been charged.
As sought by the 2017 lawsuit, the court order permanently enjoins the Victory dealerships from engaging in fraudulent, deceptive and illegal sales tactics, and other deceptive practices. Both dealerships are also directed to pay restitution to consumers, damages and civil penalties after an accounting is provided.
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