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BOGUS BUYOUTS BANNED

A.G. Schneiderman Announces $170,000 Settlement With Yonkers Auto Dealer Over Bogus "Buyout Fee"

Westchester Toyota Charged Hefty Fee To Consumers Who Purchased A Vehicle When Their Lease Expired But Provided No Commensurate Services Or Benefits; 228 Customers To Receive $150,ooo Restitution

Schneiderman: My Office Is Committed To Stopping Deceptive Auto Dealer Practices

State Attorney General Eric T. Schneiderman announced on Monday that his office has reached a settlement with Westchester Foreign Autos, Inc., d/b/a Westchester Toyota, a Yonkers auto dealer that was adding a bogus “buyout fee” to the price customers paid for buying their vehicle at the end of their lease. Under the settlement, Westchester Toyota will repay a total of $149,407 to 228 customers who were charged the bogus buyout fee. The dealership will also pay $22,000 in costs and penalties to New York State.

“New York auto dealers, like all New York businesses, cannot charge hidden fees and offer nothing in return. If they do so, they are breaking the law, deceiving their customers and creating an unfair marketplace,” Attorney General Schneiderman said. “My office will continue to monitor this dealer’s business practices and those of other auto dealers, to ensure that they are fair and honest.”

Between January 1, 2011, and January 31, 2013, Westchester Toyota, located at 2167 Central Park Avenue, charged its customers a Lease Buyout Processing Fee (“buyout fee”) in addition to the residual value of the vehicle, which is the amount the vehicle is worth and can be purchased for at the end of the lease (the “buyout price”). The buyout fees ranged from $295 to $2,895.

The buyout fee was not disclosed to consumers when they leased their vehicles. They learned of it only when it was added to the vehicle’s buyout price at the expiration of their lease.

Westchester Toyota provided few, if any, services or benefits to consumers in exchange for the buyout fee. The buyout fee was, for the most part, an extra fee for which consumers did not receive commensurate services or benefits.

The Westchester Toyota case was handled by Assistant Attorney General Sandra Giorno-Tocco and Senior Consumer Frauds Representative John Katzenstein. Gary Brown is the assistant attorney general-in-charge of the Westchester Regional Office and Marty Mack is executive deputy attorney general for regional affairs.

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