MOUNT KISCO- Customers of two Mt. Kisco auto dealerships who were unfairly overcharged through fees presented as sales commissions will receive refunds following action by New York Attorney General Letitia James.
DARCARS Lexus and Mt. Kisco Automotive BMW were the subject of the investigation.
According to James, the companies 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.
James also alleged that the dealerships 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 the investigation, DARCARS Lexus will pay $892,671.26 to reimburse consumers charged the sales commission fee between October 23, 2021, and May 30, 2022. Both dealerships will also provide an additional $281,847.72 in reimbursements. Consumers charged after May 2022 may seek restitution through a claims process, which could bring total refunds to several million dollars.
James said: “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.”
The Attorney General opened the investigation in February 2022 after receiving a consumer complaint claiming that DARCARS Lexus had added a more than $700 “sales commission charge” to their purchase without telling them.
James said that when consumers asked DARCARS employees about the charge, they received inconsistent, vague, conflicting, or misleading explanations that further obscured the fee’s true purpose. Consumers were falsely told the charge was either a standard dealer fee or direct compensation for their salesperson.
In other cases, the dealerships falsely told consumers that the fee was required to “offset costs and commissions” paid to employees. On their respective websites, DARCARS Lexus and DARCARS BMW advertised sale and leasing prices that excluded the sales commission fees, making them appear competitive with other local dealerships. By applying the two percent fee to nearly every sale and lease, the dealerships were able to generate millions of dollars in additional revenue by misleading consumers who believed they were paying a fair price.
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