A.G. Schneiderman Sues To Stop Used Car Loan Broker That Deceived Numerous Mohawk Valley Consumers
Car Loan Broker Illegally Required Mohawk Valley Customers to Purchase Unnecessary Extended Warranties to Qualify for Car Loan
Schneiderman: My Office will Hold This Company Responsible for Repeatedly Preying on Local Consumers Desperate for Transportation
UTICA - Attorney General Eric T. Schneiderman today announced that his office will file a lawsuit against One Source Networking, of Auburn, New York, for using deceptive business practices against hundreds of Mohawk Valley consumers. The company and its owner, Sara Fagan, are accused of repeatedly and persistently deceiving customers by requiring them to purchase an extended warranty in order to qualify for a vehicle loan. The lawsuit is seeking restitution and civil penalties.
"One Source Networking took advantage of desperate Mohawk Valley consumers who needed cars to get to and from work," said Attorney General Schneiderman. "This company has taken customers for a ride, repeatedly deceiving them into paying more for loans than necessary. The message we are sending today is clear: If you're an unscrupulous business who preys on an unsuspecting public, this office will go after you."
When customers with poor or limited credit history sought to purchase vehicles at used car dealerships in the Mohawk Valley or Central New York regions, the dealers would frequently refer them to one of a number of financing companies, including One Source Networking. One Source Networking, is a third party car loan broker. On its website it advertises that it provides "fast, easy, no hassle credit for consumers who have been bankrupt or have poor credit."
The Attorney General's investigation over the course of several months uncovered hundreds of instances where One Source loan processors falsely stated to customers that loans could only be obtained if they also purchased an extended warranty. One Source charged $1,995 for non-four wheel drive vehicles or $2,495 for four-wheel drive vehicles when the actual cost of the warranty was significantly less. This deceptive practice unnecessarily inflated the size of the loan, the amount of the sales tax to be paid on the loan, and, in many cases, the amount of time it would take pay the loan back. In a few instances where consumers refused to purchase the extended warranty, the company imposed a previously undisclosed $495 fee. In addition, the company falsely claimed that the fee was imposed by, and would be paid to, the car dealership that would not complete the sale without payment.
Hundreds of customers ended up paying more to finance a used car than they had planned or budgeted for. The Attorney General's investigation found that One Source Networking targeted those who were not able to obtain credit or had poor credit ratings, including:
- A young couple from Oneida County, newly engaged and just starting out was overcharged by more than $2,000.
- A medical intern from Oneida County, who works long hours and various shifts, needed a reliable car to and from the medical facility where she is employed. She is now paying several thousand dollars more than she had agreed to.
- A marina-mechanic from Madison County, whose place of employment is 50 miles away at Skaneateles Lake needed a car to get to and from work each day. He is now paying at least $2,000 over the original price of his vehicle.
The case against One Source Networking is being handled by Assistant Attorney General In-Charge of the Utica Regional Office, Joel Marmelstein, with the assistance of Investigator Joseph Kelly.