The owner of three car dealerships, including one in White Plains, has agreed to pay nearly $14 million to 15,000 consumers who were victims of unlawful sales practices between 2010 and 2014, according to the Attorney General’s office.
Paragon Motors, the parent company of White Plains Honda, Paragon Honda in Woodside, and Paragon Acura in Woodside, had been under investigation for alleged unlawful sale of credit-repair and identity theft prevention services, among other “after-sale” items that in some cases added more than $2,000 in hidden fees onto the sale of a single vehicle.
This settlement is part of New York Attorney General Eric T. Schneiderman’s wider initiative to end the practice of “jamming:” unlawfully driving up the price of buying a car by including fees the consumer may not be aware of.
“When consumers shop for a car, they deserve to be dealt with honestly and fairly—and not to be misled by auto dealers who use deceptive tactics to fleece their own customers,” Schneiderman said in a statement.
According to the settlement details, the dealerships had an agreement with Credit Forget, Inc. (CFI), the New York company that sold the credit repair and identity theft prevention services. The dealerships then turned around and sold those service contracts to customers at a higher price.
It is a violation of state and federal law to charge upfront fees for services that promise to help consumers restore or improve their credit, and contracts that violate the law are void, officials said. Schneiderman’s Consumer Frauds Bureau recently obtained a court order that allowed them to shut down CFI.
In the settlement, the Paragon dealerships acknowledge no admission of wrongdoing or liability.
“Our dealerships stopped offering CFI credit services to our customers in early 2014. We appreciate the Attorney General’s office bringing the matter to our attention and working with us to create a positive outcome for our customers. We thank our employees and our customers for their ongoing support. It is because of your trust in us that we are able to serve this market as we do,” Paragon said in a statement.
The Attorney General is encouraging anyone who believes they have been “jammed” with unwanted products or services, or who were sold CFI’s credit repair services by a car dealership, to file complaints online or call 1 (800) 771-7755.