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Mayor Adams, DCWP Commissioner Mayuga Secure $1.5 Million for Consumers Harmed by Predatory Used Car Dealer Group
January 11, 2024
26 Motors Dealerships Banned From Doing Business in New York City for Five Years
Agreement Builds on Administration’s Significant Consumer Protection and Worker Restitution Wins, Putting $315 Million Back Into Pockets of New Yorkers
NEW YORK, NY – New York City Mayor Eric Adams and New York City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga today 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.
“Working people use their cars to earn a living, drop their kids off at school, and take care of their loved ones, but the six car dealerships part of 26 Motors have been using predatory business practices to drive away with the hard-earned cash of New Yorkers,” said Mayor Adams. “Today, we’re proud to announce that we are holding 26 Motors accountable with an agreement that will deliver $1.5 million back into the pockets of working-class New Yorkers. This administration is being clear: We are coming after businesses that take New Yorkers for a ride.”
“This administration is committed to protecting consumers from illegal business practices and holding businesses accountable for exploiting New Yorkers,” said Deputy Mayor for Housing, Economic Development, and Workforce Maria Torres-Springer. “I thank the mayor and the Department of Consumer and Worker Protection for working to protect our neighbors and making our shared marketplace a safer one.”
“DCWP has zero tolerance for businesses that use deceptive practices to prey on our fellow New Yorkers,” said DCWP Commissioner Mayuga. “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.”
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.
To help further protect automotive consumers, the Adams administration encourages New Yorkers who are looking to buy a used car to read the Used Car Consumer Bill of Rights, which dealerships are required to post and give to each consumer before they sign a sales contract. This Consumer Bill of Rights must be provided to the consumer in the language in which the contract was negotiated if the translation is available on DCWP’s website. When shopping for a certified, pre-owned automobile, consumers should make sure they know the specific criteria for certification, obtain proof that the car they are interested in purchasing meets those criteria, and receive documentation of any promised warranties.
Any consumer who has had a problem with a used car dealership should file a complaint with DCWP online or call 311. New Yorkers who are trying to get their finances in order before buying a car or who are struggling with debt can make an appointment for free one-on-one financial counseling at one of the city’s Financial Empowerment Centers by calling 311 or going online.
Since the beginning of the Adams administration, DCWP has put more than $315 million back into the pockets of New Yorkers through consumer and worker restitution, debt relief, and financial empowerment programs. In 2023, DCWP held businesses accountable for violating the city’s workplace laws, securing almost $10 million for nearly 6,000 workers across multiple workplace cases. DCWP made strides in supporting the city’s growing self-employed population by securing more than $275,000 in worker relief over L’Officiel USA's widespread failure to pay freelancers on time or fully, in violation of the city’s “Freelance Isn’t Free Act.” DCWP also launched an expansion of “NYC Free Tax Prep” services for self-employed filers, providing free tax preparation services for gig workers, freelancers, and small business owners. In November, Mayor Adams and DCWP celebrated a win for delivery workers, beginning enforcement of the nation’s first Minimum Pay Rate for app-based restaurant delivery workers. And, just last week, DCWP earned another major win for New Yorkers when the U.S. Court of Appeals for the Second Circuit denied a challenge of the “just cause” provision of the city’s Fair Workweek Law.
“Purchasing a car under false pretenses, being tricked into buying a mechanically defective vehicle, or signing a purchase contract only to experience a 'bait and switch' on the contract terms can devastate a person's financial situation as well as their ability to maintain their daily lives,” said Daphne Schlick, director, New York Legal Assistance Group's Consumer Protection Unit. “This settlement is a win for consumers and a wakeup call for predatory dealerships that there are consequences for their harmful and illegal actions. We applaud DCWP's efforts in bringing this settlement to fruition and look forward to more bad actors being held accountable by providing relief to victims and putting an end to these duplicitous practices.”
This case was handled by DCWP Staff Counsel Barbara Luberadzka and Staff Counsel Lindsay DeCicco, under the supervision of Associate General Counsel Bradley McCormick and Deputy General Counsel Melissa Iachan of the General Counsel Division, which is led by General Counsel Michael Tiger.
The NYC Department of Consumer and Worker Protection (DCWP)—formerly the Department of Consumer Affairs (DCA)—protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCWP licenses more than 45,000 businesses in more than 40 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more. By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCWP protects the marketplace from predatory practices and strives to create a culture of compliance. Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCWP empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. DCWP also conducts research and advocates for public policy that furthers its work to support New York City’s communities. For more information about DCWP and its work, call 311 or visit DCWP at nyc.gov/dcwp or on its social media sites, Twitter, Facebook, Instagram, and YouTube.
Media Contacts:
Michael Lanza / Stephany Vasquez Sanchez
Department of Consumer and Worker Protection
(212) 436-0042
press@dcwp.nyc.gov