Thursday, March 16, 2017

Abigail Lootens
Department of Consumer Affairs
(212) 436-0042

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Department of Consumer Affairs Files Charges to Put the Brakes on Major World's Deceptive Financing and Sales Practices That Result in Predatory Lending Targeting Low Income and Immigrant New Yorkers

Consumer Affairs Calls on Other Potential Victims of Major World’s Deceptive Practices to Come Forward

NEW YORK, NY—Department of Consumer Affairs (DCA) Commissioner Lorelei Salas today announced extensive charges against several used car dealerships that together comprise Queens-based Major World (Major World Español). The company’s three dealerships and their owners are being charged with using deceptive and illegal practices to profit from vulnerable low-income and immigrant consumers. DCA’s complaint document, which will be heard at the City’s Office of Administrative Trials and Hearings (OATH), alleges numerous violations and wide-ranging consumer harm, and seeks more than $2 million dollars in consumer restitution and fines (approximately $770,000 in restitution and $1.7 million in fines). DCA is also seeking revocation of the company’s three DCA secondhand auto dealer licenses (Major World Chevrolet (43-40 Northern Boulevard), Major World Chrysler Dodge Jeep Ram (50-30 Northern Boulevard), and Major Kia of Long Island City (44-11 Northern Boulevard) and the creation of a trust fund for any unidentified consumers who have been harmed. DCA also encourages any consumer who feels Major World lied to them about the price of their car to contact the agency by calling 311, or by filing a complaint at

DCA’s investigation to-date includes 30 consumers, a fraction of the number of people likely harmed by Major World. The dealerships have had a long-standing practice of luring unsuspecting consumers, particularly those with limited English proficiency, with promises of great deals on used cars and financing, regardless of credit history, income, or income-to-debt ratios. DCA has found that Major World has been submitting false information on consumers’ credit applications, such as nature of employment, income levels, and monthly rent obligations, in addition to falsely inflating car values. Major World presumably engages in these practices to make car deals more attractive to financing companies, who then issue loans to consumers who, might not, in fact, be qualified to receive those loans. In the end, consumers, who have not been informed of their loans’ financing terms, are left with overpriced, and sometimes defective cars, and are saddled with high-interest loans that they should have never received and may not be able to afford.

“Our city’s working families, who often struggle to make ends meet, rely on their cars to accomplish life’s most basic tasks like going to work or going to school,” said DCA Commissioner Lorelei Salas. “Buying that car is usually one of the largest purchases a family makes. It is outrageous that Major World, who claims to treat its customers like family, traps these hardworking New Yorkers into loans they can’t afford. Major World has also been marketing aggressively to attract immigrant customers and their deceptive and predatory acts are as much an affront on immigrant communities as the deplorable policies we are seeing from the new federal government. Here in New York City, we are leveraging all the tools we have to curb this burgeoning lending problem that is adding to the national debt crisis.”

“Shame on Major World,” said Council Member Rafael Espinal, Chair of the City Council Committee on Consumer Affairs. “The largest lot in New York for used cars is also the largest lot for lemons and frauds. For too long now, this dishonest company has been preying on low-income and immigrant New Yorker’s. It is time we stand up and demand that fair practices be set in place, and that those who deliberately scheme and impoverish people will be brought to justice. Congratulations to DCA on their steadfast investigative work, and I look forward to working closely with the Administration on legislative and policy proposals that will establish better standard and help reign in these bad actors.”

“Predatory lending is a citywide concern, and secondhand auto dealer complaint data regarding financing reflects a significant Brooklyn impact, particularly in the communities of Bergen Beach, Brownsville, Bushwick, Canarsie, and Cypress Hills, said Borough President Eric L. Adams. As we look to combat the impact of crippling consumer debt in our borough and beyond, we must address irresponsible corporate behavior that is fueling the crisis. I thank DCA Commissioner Salas for taking decisive action against deceptive practices of dealerships preying on vulnerable consumer populations.”

“New York City's efforts to bring transparency to the car buying process will have a real, positive impact for consumers,” said John W. Van Alst, Director of the National Consumer Law Center's Working Cars for Working Families Project. "The NYC Department of Consumer Affairs’ enforcement efforts will also benefit car dealers that want to treat their customers fairly but can't compete with dealers who don't deal honestly and transparently with consumers.”

“The Center for Responsible Lending has long advocated for a fairer and safer car lending market, said Chris Kukla, Executive Vice President for the Center for Responsible Lending. The Department of Consumer Affairs’ action today is an important step to ensure that consumers are treated fairly and honestly when buying and financing a car.”

“NYLAG applauds the NYC Department of Consumer Affairs and Commissioner Lorelei Salas for everything they do on behalf of New York consumers, including those who have been defrauded by secondhand auto dealers,” said Beth Goldman, President and Attorney-in-Charge of the New York Legal Assistance Group. “Our attorneys often encounter clients directly harmed by auto lending practices involving deceptive advertising, overzealous and high-pressured sales tactics, and the sale of faulty vehicles. Many of our clients have fallen victim to schemes similar to those described in this complaint. Predatory auto loans have a lasting and devastating impact on New York consumers, threatening the already-tenuous financial stability that so many New Yorkers work so hard to achieve.”

“Major World is a classic example of the type of predatory financial practices that unfairly and inordinately target hard-working low-income New Yorkers,” said Justine Zinkin, CEO of Neighborhood Trust Financial Partners. “Every day we see the damage wrought by these practices as we work with the victims to repair their credit and begin to recover from the financial hardships they caused. We celebrate DCA's role as a strong consumer advocate in ensuring a more just marketplace.”

Major World’s deception includes:
  • Advertising Deceptively to Lure Vulnerable Consumers
    Major World advertises extensively, specifically targeting Spanish-speaking consumers and those with lower incomes or poor credit. These vulnerable consumers are lured to Major World’s dealerships by advertisements in trusted local media outlets that feature well-known local celebrities, utilized in apparent attempts to bolster Major World’s credibility. In the advertisements, consumers are directed to what seems to be an enormous inventory of reduced priced cars available on Major World’s various websites (,,,, and Major World, which advertises itself as the “World’s Largest Pre-Owned Dealer,” promises incredible deals on more than 3,000 quality pre-owned vehicles and easy financing, even for those with bad or no credit (e.g., “no credit is no problem” and “We design solutions for bad credit car buyers every day.”). Examples of their advertising include use of the phrase “Buenos, Bonitos, Baratos” [Good, Pretty, and Cheap] in reference to their cars and “Have you been searching for a reliable used vehicle that won’t break the bank and still looks sleek and current?”
  • Inflating the Price with Non-Existent Accessories
    Once a consumer walks through the door, Major World’s scheme begins. In order to create a lower “loan-to-value” ratio and ensure the financing arrangement satisfies the lending requirements, Major World falsely inflates the value of the cars by claiming they have valuable accessories that they do not in fact have, such as aluminum/alloy wheels ($350), a Bose Premium Stereo ($350), or a rear entertainment system ($650). In some cases, Major World also adds service repair contracts without the consumer’s knowledge or consent. These additions often inflate the price of the cars by thousands of dollars.
  • Falsifying the Consumer Credit Applications
    Major World also falsifies information on consumer credit applications without the consumers’ knowledge. They alter employment statuses and job titles, inflate income, and deflate expenses in order to present a more financially stable consumer to lenders. For example, in one falsified application, Major World turned the consumer from a grocery store manager to a grocery store owner, quadrupled his salary, and reduced his rent by 75 percent. In another example, Major World more than tripled the consumer’s income from under $20,000 to $63,000, and reported that she was paying $400 in rent when her rent was close to $1,100. In some instances, Major World submitted falsified information that directly contradicted the consumers’ supporting documentation, like pay stubs and bank statements. Major World’s dishonesty results in consumers receiving high-principal, high-interest auto loans for which they would not otherwise qualify and may not be able to afford. For example, their advertising states that for them, “no credit is no problem” and “[they] design solutions for bad-credit car buyers every day.”
  • Failing to…
    • Disclose (and Even Concealing) Financing Terms;
    • Provide Contracts in Spanish after Negotiating in Spanish; and
    • Sell Roadworthy Vehicles
    Once the financing is secured, Major World negotiates the rest of the transaction, often in Spanish. During these negotiations, Major World typically fails to inform consumers of the precise terms of the financing agreement, such as interest rates, finance charges, and number of required payments. In some cases, Major World actively conceals this information by folding over pages or obscuring information from consumers’ view during signing.

    Despite claims of a “no pressure sales experience,” Major World illegally pressures Spanish-speaking consumers into signing contracts and other supporting documents in English even when the transactions are negotiated in Spanish, the primary language of its target consumers.

    Finally, despite being required by law to do a safety inspection of the brakes, steering mechanism, wheel alignment, lights, license plates, odometer, tire pressure, seatbelts, and other mechanisms and equipment, such as the windshield, and certify that the vehicle is roadworthy, Major World has sold dangerously defective vehicles that have broken down shortly after purchase. The repairs cost the consumers hundreds, sometimes thousands, of dollars and, in several instances, Major World refused to address the unsafe condition of the vehicles and make repairs.

While DCA has received 114 complaints about Major World since 2014, the complaints rarely cite financing specifically, making clear that consumers don’t often realize the nature of the harm they’re experiencing. Typically, the consumers who executed these loans never knew of Major World’s deceptive conduct, only that they struggle to make their car payments, which contributes to the country’s rising auto loan debt levels. These unsuspecting New Yorkers are just a small fraction of millions of Americans nationwide who are suffering from burdensome auto debt.

According to the Federal Reserve Bank of New York, auto loan debt is one of the fastest-growing household debt levels, with an increase of nine percent from 2015 to 2016, and 13 percent since 2005. At the end of 2016, Americans had nearly $1.2 trillion in outstanding auto loan debt. Consumer reporting agencies report that more than 25 percent of auto loans are classified as subprime and that the number jumps above 30 percent for used car loans. These cars are, however, vital for Americans to sustain their livelihoods and, for many, having access to a car can mean the difference between poverty and self-sufficiency. A 2014 Urban Institute study found that “in almost all metropolitan areas, individuals without reliable access to automobiles can reach far fewer opportunities within a reasonable travel time compared with those who travel by automobile.” Access to a car was also found to be particularly important for low-income women and female-headed households, for whom having access to a car access often meant a higher likelihood of leaving welfare and increased income.

DCA’s announcement of today’s charges against Major World represents one prong of DCA’s efforts: enforcement, education, and advocacy. To call attention to abuses in this industry and to gather information that could help inform potential solutions at the local level, DCA and Council Member Rafael L. Espinal, Jr., Chair of the Council’s Committee on Consumer Affairs, held a joint public hearing last October. The hearing included testimony from consumers, as well as from national experts and legal service providers. While some of the financing-related challenges raised by consumers at the hearing would require state or federal action, New York City’s secondhand automobile dealer licensing law has provided unique opportunities for the City to take the lead in holding dealers accountable for their predatory business practices.

DCA currently licenses 775 used car dealerships citywide, and it has received more than 5,500 complaints about the industry since mid-2013, including more than 1,050 since July 2016, the start of the current fiscal year. In addition to complaints about financing, DCA receives a large volume of complaints regarding deceptive advertising, high-pressured sales tactics, and faulty vehicles. Since July 2013, DCA has conducted nearly 2,500 inspections (Spanish) of used car dealerships and issued more than 650 violations, most of which are for unlicensed activity, failing to post required signage, and parking vehicles on the sidewalk or roadway. As a result of the mediation of consumer complaints, investigations and settlements, DCA has secured nearly $913,000 in consumer restitution and assessed $1.6 million in fines against used car dealerships over the past three years.

Last week, as part of National Consumer Protection Week, DCA highlighted the growing subprime auto lending crisis and released a guide to Getting Your Finances in Gear to Buy a Used Car, which is currently available in English and Spanish, with additional languages coming soon. The guide informs New Yorkers of their rights when arranging financing for their used car purchase and provides general tips about used car dealerships. You can also visit DCA’s YouTube channel to hear Rhoda Branche, a New Yorker who testified at last fall’s public hearing, share her experience buying and financing a used car and how DCA was able to help her get her money back. DCA also offers a comprehensive Used Car Buyer Guide with tips about shopping for a used car. DCA encourages any consumer who feels they may have been a victim of Major World or has had a problem with any used car dealership, to file a complaint by visiting or contacting 311. Any New Yorker who is trying to get their finances in order before buying a car or who is struggling with debt, can make an appointment for free, one-on-one financial counseling at one of the City’s Financial Empowerment Centers by calling 311.

The NYC Department of Consumer Affairs (DCA) protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCA licenses more than 81,000 businesses in more than 50 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more. By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCA protects the marketplace from predatory practices and strives to create a culture of compliance. Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCA empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. DCA also conducts research and advocates for public policy that furthers its work to support New York City’s communities. For more information about DCA and its work, call 311 or visit DCA at or on its social media sites, Twitter, Facebook, Instagram and YouTube.