City Secures $1.5 Million for Consumers Harmed by Predatory Used Car Dealer Group

City Secures $1.5 Million for Consumers Harmed by Predatory Used Car Dealer Group

By Forum Staff

Mayor Eric Adams and City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga on Thursday announced an agreement with 26 Motors — a group of six used car dealerships — that will deliver $1.5 million in relief to New Yorkers harmed by the dealerships’ deceptive sales practices. The agreement resolves numerous violations of the city’s Consumer Protection Law that protects against deceiving and otherwise preying on vulnerable consumers, as well as licensing laws prohibiting other unlawful conduct in the industry. Mayor Adams and DCWP Commissioner Mayuga also secured $300,000 in civil penalties from the company, and a five-year ban on five of the seven individual owners from owning and operating a used car dealership in New York City.

For years, 26 Motors displayed a pattern of predatory business practices. The dealerships used false advertising to lure consumers into buying mechanically defective vehicles and refused to honor their advertised prices. They also deceived consumers about the true cost of vehicles by posting misleading information online. Additionally, the dealerships preyed on financially vulnerable consumers by forcing them into financing deals and provided false information to financial organizations to secure loans.

Finally, they tricked consumers into signing illegal waivers and refused to provide them with legally required disclosures upon request, among other violations of the city’s Consumer Protection Law.

Since 2017, DCWP has received more than 100 consumer complaints about 26 Motors’ dealerships in the Bronx and Queens, alleging harm stemming from deceptive business practices, including the use of an elaborate false advertising scheme across numerous websites; overcharging consumers; selling mechanically defective vehicles; and routinely failing to provide consumers with legally mandated disclosures.

In April 2023, DCWP charged 26 Motors with over 9,500 violations at the Office of Administrative Trials and Hearings related to the dealerships’ deceptive business practices. As part of the settlement, 39 consumers will receive at least $400,000 in payments, leaving $1.1 million for other consumers of the dealerships who have yet to come forward with claims. Claims can be submitted directly online.

DCWP currently licenses more than 460 secondhand auto dealers and has received more than 4,400 complaints about the industry over the past five years. In that same period, DCWP conducted more than 2,600 inspections of used car dealerships and issued more than 840 summonses. The most common violations include failure to post required signs, parking or storing cars on sidewalks and public roadways, and 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 $1.9 million in consumer restitution and more than $5.2 million in fines against used car dealerships over the past five years.

“DCWP has zero tolerance for businesses that use deceptive practices to prey on our fellow New Yorkers,” Mayuga said. “A car is a major but necessary expense that many consumers need to get to work and to take care of their loved ones, and no one should be pressured or deceived into buying a defective vehicle. With this agreement, we are sending a clear message that this administration will continue to support working people and protect all New Yorkers from predatory businesses.”


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