Settlement Ensures That Consumers Won't Be Lured To Dealership By Misleading Sale Prices

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

Attorney General Eric T. Schneiderman recently announced that his office reached a settlement with Hyundai of White Plains LLC, d/b/a Hyundai of White Plains. An investigation by the Attorney General’s Office found that the auto dealer used deceptive and misleading advertising practices in both its print and online ads. Among its deceptive practices, the dealership widely promoted sale and lease prices that were illusory because they included discounts or rebates that were not available to most consumers, and thus, did not represent the actual sale or lease prices. The dealership has agreed to reform its advertising practices and will pay $32,500 in costs and penalties to New York State.

“A car is one of the most expensive and significant purchases many families make,” said Attorney General Schneiderman. “When shopping for a car, New Yorkers deserve to be dealt with honestly and fairly – not misled by false advertising. My office will not tolerate car dealerships that mislead consumers with ads featuring inaccurate, artificially low prices.”

Hyundai of White Plains regularly advertised prices which included discounts or rebates such as:

• a “military” rebate, which was available only to certain current or former military personnel;
• a “college graduate” rebate, which was available only to recent college graduates;
• a “loyalty” rebate, which was available only to customers who had purchased a new vehicle within the last six months;
• an “HMF” discount, which was available only to consumers who financed their purchase.

In some cases, the discounts and rebates totaled as much as $4,500, so the actual price of the vehicle for many consumers was significantly more than advertised. The only disclosure that the advertised prices included these rebates and discounts was in tiny footnotes at the bottom of the advertisements.

The Attorney General's investigation also cited Hyundai of White Plains for other problems with its ads, and the settlement requires the dealership to reform those practices as well. These problems included:

• Using footnotes or asterisks that contradict, confuse or materially modify a principal message of an ad;
• Failing to clearly and conspicuously provide certain required disclosures for lease or finance terms, such as the amount or percentage of any down payment;
• Restricting a rate or price to a “qualified buyer” or “qualified lessee” without disclosing such qualifications;
• Failing to disclose the duration of sales and promotions that were time-limited.

The Attorney General found that these practices constitute false advertising and fraudulent, deceptive and misleading business practices. The practices also did not comply with the Attorney General's Advertising Guidelines for Auto Dealers, which identify certain deceptive advertising practices.

The Hyundai of White Plains case was handled by Volunteer Assistant Attorney General Irma K. Nimetz. Gary Brown is the Assistant Attorney General-In-Charge of the Westchester Regional Office and Marty Mack is Executive Deputy Attorney General for Regional Offices.