New York Attorney General Letitia James secured more than $1 million in refunds for New Yorkers who were unfairly overcharged by two Westchester car dealerships, DARCARS of Railroad Avenue, Inc. (DARCARS Lexus) and MT Kisco Automotive, LLC (DARCARS BMW). An investigation by the Office of the Attorney General (OAG) found that the DARCARS dealerships, both located in Mt. Kisco, imposed a two percent charge on consumers that was deceptively presented as a sales commission, even though it was not paid directly to the salesperson, was completely optional, and provided no benefit to the consumer. The dealerships also charged customers for an expensive and needless add-on package by presenting it as a mandatory part of their lease or purchase agreement. The dealerships used these misleading tactics to overcharge customers thousands of dollars when they leased or purchased their car.
As a result of OAG’s investigation, DARCARS Lexus will pay a total of $892,671.26 to reimburse all consumers who were charged the sales commission fee between Oct. 23, 2021, and May 30, 2022. Both DARCARS dealerships will also pay additional reimbursements totaling $281,847.72. Consumers who were charged after May 2022 will also be eligible for restitution through a claims process, potentially resulting in millions of dollars in total consumer refunds.
“New Yorkers save up for years to buy a car, and they deserve fair prices without junk fees that drive up the cost with useless add-ons,” said James. “DARCARS took advantage of hard-working New Yorkers, charging them thousands of dollars in misleading fees. My office is making sure that every New Yorker who was defrauded by these dealerships gets their money back.”
As a result of the settlement with OAG, thousands of customers who purchased or leased cars from these DARCARS dealerships will be eligible for restitution. DARCARS Lexus will pay $892,671.26 to reimburse all consumers who were charged the sales commission fee between October 23, 2021, and May 30, 2022. Both dealerships will pay $116,849 back to customers who were misled into paying for DARCARS Assurance and complained to OAG. Additional consumers who informed OAG about the dealerships’ deceptive sales commission fee will receive a total of $164,998.72 in refunds. Other consumers who paid these fees will be mailed claims forms, and the dealerships must also pay restitution to any consumer who submits a valid claim, which may result in millions of dollars in refunds being distributed.
In addition to reimbursement of fees, DARCARS has stopped charging sales commissions and will clearly disclose all future fees and any add-on products or services to consumers. DARCARS is also banned from offering or selling DARCARS Assurance or any similar junk bundle or package at any New York dealership. All employees, including sales and finance personnel, and those involved in marketing and advertising, will be subject to annual training on fair business practices. DARCARS will also pay $700,000 in penalties.
