A Suffolk County, N.Y. car dealership charged with the unlawful sale of credit repair and identity theft prevention services - along with other “after sale” items to more than 1,000 customers - agreed Thursday to settle allegations brought by Hew York Attorney General Eric T. Schneiderman’s office.

The $217,000 settlement with Nissan 112 returns more than $195,000 in restitution to consumers. The Consumer Frauds Bureau with the New York AG’s office obtained a consent order earlier this year that shut down Credit Forget Inc., a New York firm that sold the unlawful credit repair and identity theft prevention services to car dealerships.

It violates federal and New York laws to charge upfront fees for services promising to help people restore or improve their credit. An investigation by the AG’s office found that, between January 2012 and April 2014, Nissan 112 used fraudulent, deceptive and illegal methods to sell approximately 1,000 Credit Forget Inc. contracts to consumers. 

After a consumer worked with a salesperson to choose a car, they met with a "Finance & Insurance Manager" who attempted to sell them additional products such as extended warranties, a security system and credit repair services. In many cases, the investigation showed Nissan 112 simply charged consumers for the credit repair services, yet concealed the fact that they were doing so.  Some consumers were sold the services without their knowledge despite the fact they had excellent credit.

Along with charging consumers for credit repair and identity theft services, Nissan 112 added charges for other items, such as tire protection and dent protection, without clearly disclosing what they were doing so. The costs of these items were often bundled into the vehicle sale price and not separately itemized. As a result, often unbeknownst to the consumer, the price of the car stated on purchase and lease documents was inflated by the amount of these after-sale items.

Nissan 112 will make $115,652 in payments reimbursing 997 consumers. The restitution includes profits the company made from consumers related to the unlawful CFI contracts they sold. The company also paid more than $72,000 in restitution to a dozen other consumers who were subjected to deceptive business practices and $8,027 in restitution to consumers illegally charged “administrative fees.” 

Nissan 112 also paid a $20,000 penalty and $1,000 in costs. The settlement requires Nissan 112 to stop using deceptive and misleading sales tactics and to provide documents and disclosures required by law, including the itemization of the cost of after-sale items in sale and lease agreements. 

 

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