Attorney General Announces Crack-down On Long Island Car Dealerships

Attorney General Spitzer today announced action against three Long Island car dealerships for deceptive sales practices involving hundreds of consumers. Spitzer charged the companies with violating numerous consumer protection laws including those prohibiting false advertising.

Two of the dealerships, Oyster Bay Nissan of Syosset and Major Nissan of Inwood, have signed agreements to stop the illegal practices. Pursuant to the agreements with the Attorney General, Oyster Bay Nissan will pay $172,000 in penalties, costs and restitution; Major Nissan will pay $12,000 in penalties and costs.

Attorney General Spitzer has filed a lawsuit against the third company, Hempstead Nissan of Hempstead, for alleged violations of consumer protection laws. The state is seeking to stop the company's deceptive practices, as well as $650,000 in penalties and recovery of the costs of bringing the lawsuit.

"Unscrupulous businesses should take note of our actions," said Spitzer. "We will not tolerate deceptive practices in any industry, and we will be closely monitoring consumers' complaints."

The Attorney General's Office received some 75 consumer complaints concerning Oyster Bay Nissan and about 100 against the Hempstead dealership. The complaints against these two dealerships included false advertising, failure to return deposits, forgery, and other deceptions. Major Nissan had nine complaints filed against it including allegations of false advertising and failure to return deposits.

"A car is no longer a luxury item for most families; it is an expensive necessity," said Spitzer. "These dealerships have profited by preying upon vulnerable consumers using high pressure sales pitches and deceptive marketing. We will not allow consumers to be defrauded by these business practices."

Consumers complained of being lured into dealership showrooms by deceptive ads and coerced into purchasing cars that were more expensive than advertised or vehicles they could not afford. Other consumers suffered the inconvenience and expense of dishonored sales agreements, and many lost deposits which are, by law, refundable.

The Office of the Attorney General was particularly concerned with practices relating to deposit refunds and extended service contracts.

Oyster Bay Nissan routinely failed to return consumer deposits even when the consumer was denied credit and was thus unable to conclude the transaction. New York law specifically provides that if a dealer agrees to obtain financing for a consumer as a condition of an automobile sale, the consumer is entitled to his or her deposit back if acceptable financing cannot be found.

It is also illegal for car dealerships to require consumers to purchase service contracts as a condition of a loan or as a condition for the sale of the vehicle. The Attorney General's investigation found that this measure was routinely violated by Oyster Bay Nissan and Hempstead Nissan.

Oyster Bay Nissan, located at 268 Jericho Turnpike, and Major Nissan, located at 550 Burnside Avenue, are owned by the same principals, Bruce Bendell and Nick Guadagno. Hempstead Nissan, located at 209 North Franklin Street, is owned by Frank Staluppi. Attorney General Spitzer reminds consumers to read sales documents before signing to make sure that the negotiated sales terms are accurately reflected in the documents. Consumers should not be rushed into purchasing a vehicle and should never sign blank documents.

This case was handled by Assistant Attorney General Merrill Scannell of Spitzer's Nassau Regional Office.

Consumers who want to file a complaint against a car dealership, including these, are encouraged to call the Attorney General's hotline at (800) 771-7755. For information, visit his web site at www.ag.ny.gov

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