NEW YORK — Attorney General Eric T. Schneiderman’s initiative to end dealer “jamming,” or payment packing, has resulted in four separate settlements with four dealer groups. They agreed to return nearly $2 million in restitution to nearly 5,000 consumers and $174,000 in penalties and costs to the state.

The attorney general charged the deales groups — Koeppel Auto Group, Plaza Dealerships, Huntington Honda and Manfredi Auto Group — with unlawfully selling after-sale products, including a credit repair and identify-theft protection services. The regulator alleged the groups hid products in customers’ deals, which often resulted in thousands of dollars added on to the purchase price of a vehicle. 

“Consumers deserve to be treated honestly by car dealerships, and shouldn’t be hit with hidden fees that inflate the price of the vehicle,” Attorney General Schneiderman said. “My office will continue to make it a priority to crackdown on these deceptive business practices that target unsuspecting consumers.”

The settlements are part of the attorney general’s wider initiative to end the practice of payment packing. Last year, Schneiderman’s office obtained a consent order to shut down Credit Forget It, a New York company that sold the unlawful credit repair and identity theft protection services to the named dealer group and others. 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.

The regulator’s investigation found that, between 2010 and 2015, the four dealers allegedly used "fraudulent, deceptive and illegal methods" to sell CFI contracts.

According to the attorney general’s complaint, the dealers’ F&I managers allegedly bundled the cost of F&I products, including the CFI services as well as service contracts and other products, into the vehicle sales price without itemizing the products. In some cases, consumers were unaware they had purchased the products. In others, consumers thought the add-ons were free.

The dealer groups were also charged with failing to provide required disclosures such as a consumer's right to cancel the credit repair services contract. In his office’s investigation into Koeppel Auto Group, the attorney general found that when negotiations were conducted in a language other than English, the group provided sales documents in English and not in the language in which the negotiations were conducted.

As part of the regulator’s settlement with Koeppel, the dealer group must provide a translation of certain material documents in the language in which the terms were negotiated before the consumer signs these documents.

The settlements also prohibit the dealerships from:

• Selling, offering to sell or marketing credit repair and identity theft services in connection with the sale or lease of a vehicle;

• Selling, offering for sale, or providing to consumers any after-sale product or service unless, prior to such sale, certain material terms, including price, are disclosed verbally and in writing;

• Misrepresenting the price of the vehicle in final lease or sale contracts;

• Failing to provide consumers with sales or lease agreements that clearly and conspicuously itemize each after-sale product or service and its price.

The Plaza Dealerships were charged with deceiving 1,600 consumers. The group was ordered to pay $800,000 in restitution and $64,000 in penalties and fees. The dealerships involved in the settlement were: Plaza Oldsmobile; Plaza Toyota-Plaza Scion; Plaza Hyundai; Plaza Motors of Brooklyn, which does business as Plaza Honda; and Crystal Bay Imports, which does business as Acura of Brooklyn.

Huntington Honda was charged with deceiving 475 consumers and ordered to pay $270,950 in restitution and $30,000 in penalties. The dealerships involved in the settlement were: Huntington Honda Inc.; Westchester Autoplex, which does business as Honda of New Rochelle; and Automotive Inc., which does business as New Rochelle Toyota.

The Manfredi Auto Group dealerships were charged with deceiving 1,497 consumers. It was ordered to pay $425,000 in restitution and $30,000 in penalties and fees. The dealerships involved in the settlement were:  Manfredi Auto Group, whichi does business as Manfredi Fiat and Fiat of SI; Manfredi Auto LLC, which does business as Manfredi Mitsubishi;  Manfredi Auto Mall, which does business as Manfredi Kia; Manfredi Cadillac, which does business as Manfredi Hyundai, Manfredi Chevrolet, which does business as Manfredi Cadillac; Manfredi Chrysler Jeep & Dodge of Staten Island; Manfredi Chrysler, Jeep & Dodge; Manfredi Fiat Inc.; Manfredi Motors Inc., which does business as S.I. Toyota, Manfredi Toyota and Manfredi Scion; Manfredi Subaru; SI Safe Auto, which does business as Manfredi Mazda; and Staten Island Motors, which does business as Staten Island Subaru.

The Koeppel Auto Group dealerships were charged with deceiving 1,361 consumers. The group was ordered to pay $500,000 in restitution and $50,000 in penalties and fees. The dealerships involved in the settlement were: Koeppel Nissan; LK Automotive Enterprises, which does business as Koeppel Subaru; KL Auto Enterprises, which does business as Koeppel Mazda; and Koeppel Volkswagen.