Department of Consumer and Worker Protection Files Cases Against Multiple Predatory Used Car Dealerships

November 3, 2021

NEW YORK, NY – Department of Consumer and Worker Protection (DCWP) Commissioner Peter A. Hatch today announced cases against two used car dealership companies—Kings Autoshow and JF Motors, which operate a total of five dealerships in Brooklyn and Queens—for engaging in deceptive and unlawful trade practices that preyed on vulnerable New Yorkers, as well as consumers from across the tristate area. DCWP’s cases, which will be heard at the City’s Office of Administrative Trials and Hearings (OATH), allege thousands of violations, including violations of the City’s new laws and rules designed to prevent predatory conduct by the industry.

In its case against Kings Autoshow, which operates two Brooklyn Mitsubishi locations, DCWP is charging the company with more than more than 7,000 violations and seeking more than $50,000 in restitution for 34 consumers, civil penalties, and revocation of both of its used car dealership licenses. The case against JF Motors includes Automania, Luxury Automotive Club, and the now-closed World Auto, all of which are in Queens. DCWP is charging the JF Motors family of dealerships with more than 9,000 violations and seeking more than $100,000 in restitution for nine consumers, civil penalties, and revocation of its two remaining licenses. DCWP is also seeking to hold the respective owners, and Brooklyn Mitsubishi’s general manager, personally liable for the violations.

“These dealerships repeatedly victimized their customers and violated consumer protection laws,” said DCWP Commissioner Peter A. Hatch. “We are taking action to a put a stop to their exploitative practices, obtain restitution for the consumers they harmed, and to revoke their licenses so they cannot do this again.”

“I was looking for a good experience in buying my very first car. Instead, I was taken advantage of and cheated out of my hard-earned money,” said Brooklyn Mitsubishi customer Jefferey Williams. “No one should ever have to go through this with any used car dealership, especially if it’s their first time.”

“Brooklyn Mitsubishi made it clear that they were not on my side the moment I walked through their doors. There was no explanation of the car-buying process and I didn’t even receive my paperwork on the same day,” said Brooklyn Mitsubishi customer Karinie Olivero. “I felt used, robbed, betrayed and unhappy with how they treated me. It was very troubling as a consumer and as a hard-working New Yorker to go through this kind of treatment.”

“The National Independent Automobile Dealers Association does not condone illegal or unethical practices. We continually strive to strengthen the integrity of our industry-leading certified pre-owned (CPO) program through enhanced technology and training,” said National Independent Automobile Dealers Association CEO Bob Voltmann. “The all-new NIADA CPO 3.0 program will guard against fraudulent and deceptive practices through a digital inspection process and will require participating dealers to complete training and acknowledge NIADA’s Code of Ethics.”

The dealerships’ unlawful conduct includes:

• Using False Advertising to Lure Consumers and Charging More Than Advertised
  Both companies used deceptive advertising to lure customers to their dealerships and then illegally sold cars at prices well above the advertised prices. For example, one consumer saw a 2017 Jeep 4W Grand Cherokee advertised by Brooklyn Mitsubishi on CarGurus.com for $27,994. She visited the dealership and, after taking her down payment, Brooklyn Mitsubishi rushed her through signing all the paperwork and ultimately charged her $36,585 for the automobile, or $8,500 above the advertised price.
  
  Both Brooklyn Mitsubishi dealerships persistently advertised “expired” prices with false claims stating, “the price you see is the price you pay” and “no dealer fees” that weren’t honored when consumers got to the dealership. They also falsely advertised accessories, warranties, and add-on products that did not come with the vehicle.
  
  JF Motors’ dealerships frequently marketed their cars as “Certified Pre-owned” by the National Independent Automobile Dealers Association (NIADA) even though JF Motors did not conduct the required 125-point inspection, give buyers the promised 10-year/100,000 warranty, or provide the vehicle history report for each vehicle. JF Motors inflated prices by adding fake fees, even charging consumers a fee for the fake NIADA certification.

• Misleading Consumers about Financing
  The Brooklyn Mitsubishi dealerships had a practice of luring consumers with lower credit scores by promising “guaranteed approval” for financing and pre-approval for financing from a fake finance company.

• Conducting Other Illegal Activity
  The Brooklyn Mitsubishi dealerships misled consumers about warranties, executed illegal contracts, failed to maintain required records, failed to respond to DCWP’s subpoenas, and submitted false license applications to DCWP.
  
  The JF Motors dealerships used illegal contracts, required consumers to buy service contracts that either did not exist or had less coverage than promised, overcharged out-of-state buyers for title and registration fees, and failed to provide contracts and other documents to consumers in Spanish even though the deal was negotiated in Spanish.

DCWP currently licenses 476 used car dealerships and has received more than 10,000 complaints about the industry since 2014. In that same period, DCWP has conducted more than 4,500 inspections of used car dealerships and issued more than 1,600 violations, most of which were for 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 nearly $3.4 million in consumer restitution and more than $5.5 million in fines against used car dealerships since 2014.

DCWP 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. The 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. Any consumer who has had a problem with a used car dealership should to file a complaint by visiting nyc.gov/dcwp or contacting 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 online at nyc.gov/TalkMoney.

DCWP’s cases are being handled by Senior Staff Counsel Bradley McCormick and Staff Counsel Mark Butler, under the supervision of Associate General Counsel Adam Blumenkrantz of the General Counsel Division, which is led by General Counsel Tamala Boyd and Deputy General Counsel Michael Tiger.

NYC Department of Consumer and Worker Protection (DCWP) protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCWP licenses more than 59,000 businesses in more than 50 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.