July 15, 2022
Video available at: https://www.youtube.com/watch?v=wDYjSj1qpH8
New York – New York City Mayor Eric Adams and New York City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga today announced a settlement with Brooklyn Mitsubishi and Brooklyn Volkswagen that will deliver $304,900 to New Yorkers wronged by the companies' deceptive practices when selling used cars. The agreement resolves numerous violations of the city's Consumer Protection Law, as well as licensing laws prohibiting deceptive and unlawful conduct in the industry. Mayor Adams and DCWP also secured $500,000 in civil penalties from the companies and a seven-day suspension of Brooklyn Mitsubishi's two licenses, which has been completed.
"We're not going to allow anyone to pick New Yorkers' pockets on the street or in a used car lot," said Mayor Adams. "This settlement is about protecting New Yorkers and sending a clear message: If you break the law and harm consumers, we will hold you accountable. We are helping deliver more than $300,000 back into the pockets of New York City consumers who were ripped off by Brooklyn Mitsubishi and Brooklyn Volkswagen and are stopping their unlawful behavior dead in their tracks. New Yorkers can trust that our administration will fight to protect every consumer, especially when their making big purchases like a car."
"Any business that uses illegal practices to profit from vulnerable New Yorkers will be held accountable," said Deputy Mayor for Economic and Workforce Development Maria Torres-Springer. "I commend the Department of Consumer and Worker Protection for putting a stop to their exploitative practices and ensuring a safe marketplace for New Yorkers."
"A car can be one of the most expensive purchases consumers make and we will always do everything we can to protect the city's consumers from unscrupulous auto dealers," said DCWP Commissioner Mayuga. "With this settlement, we are delivering hundreds of thousands of dollars in restitution for victims of Brooklyn Mitsubishi and Brooklyn Volkswagen and sending a clear message to the used car industry that DCWP has zero tolerance for businesses that seek to prey on unsuspecting consumers with predatory financing and sales practices."
"I wanted to buy a car to provide a better life for myself and my family," said Karinie Olivero, consumer who is receiving restitution as part of today's settlement. "But these dealerships preyed on consumers like me with false and misleading information, and they failed to notify me of my rights under the law. Thankfully, Mayor Adams and Commissioner Mayuga have helped me recoup some of my investment and sent a clear message to all dealerships engaged in fraudulent practices that this kind of activity will not be tolerated."
Last November, DCWP charged Brooklyn Mitsubishi and Brooklyn Volkswagen with more than 7,000 violations. As part of today's settlement, 36 consumers are getting restitution totaling $154,900, leaving $150,000 for new consumers who come forward with complaints, which can be submitted directly on DCWP's website in English or Spanish. As part of the settlement, these dealerships agree to fully comply with the law going forward.
In the suit, DCWP charged the dealerships with using deceptive advertising to lure customers to their dealerships and then illegally selling cars at prices well above the advertised prices. The dealerships persistently advertised "expired" prices with false claims stating, "the price you see is the price you pay" and "no dealer fees" that weren't honored when consumers got to the dealership. The dealerships also falsely advertised accessories, warranties, and add-on products that did not come with the vehicle.
Additionally, the dealerships had a practice of luring consumers with lower credit scores by promising "guaranteed approval" for financing and pre-approval for financing from a fake finance company. The dealerships misled consumers about warranties, executed illegal contracts, failed to maintain required records, failed to respond to DCWP's subpoenas, and submitted false license applications to DCWP.
DCWP currently licenses 509 used car dealerships across New York City and has received more than 5,000 complaints about the industry over the past five years. In that same period, DCWP has conducted more than 3,346 inspections of used car dealerships and issued more than 2,070 violations, most of which were for failure to post required signs, parking or storing cars on sidewalks and public roadways, or missing price disclosures. As a result of mediating complaints, charging businesses with violations of the applicable law and rules, and executing settlements, DCWP has secured over $1.8 million in consumer restitution and more than $4.7 million in fines against used car dealerships over the past five years.
DCWP encourages New Yorkers who are looking to buy a used car to read theUsed Car Consumer Bill of Rights, which dealerships are required to post and give to each consumer before they sign a sales contract. This Consumer Bill of Rights must be provided to the consumer in the language in which the contract was negotiated if the translation is available on DCWP's website.
When shopping for a certified pre-owned automobile, consumers should make sure they know the specific criteria for certification, obtain proof that the car they are interested in purchasing met those criteria, and receive documentation of any promised warranties. Any consumer who has had a problem with a used car dealership should file a complaint with DCWP online or call 311. New Yorkers who are trying to get their finances in order before buying a car or who are struggling with debt can make an appointment for free with one-on-one financial counseling at one of the city's Financial Empowerment Centers by calling 311 or going online.
This case was handled by DCWP Staff Counsel Matthew Mansfield and former Staff Counsel Mark Butler, under the supervision of former Associate General Counsel Adam Blumenkrantz of the General Counsel Division, which is led by General Counsel Michael Tiger.