State slaps Mount Kisco car dealers with millions in fines, refunds

The New York State Attorney General’s Office has announced that two Mount Kisco car dealerships will have to pay more than $2 million in reimbursements and fines after overcharging customers with deceptive add-ons and misleading tactics.

DARCARS Lexus and DARCARS BMW, the attorney general’s office said, “imposed a 2 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,” a statement said. “The dealerships used these misleading tactics to overcharge customers thousands of dollars when they leased or purchased their car.”

As a result of its investigation and a settlement, the attorney general’s office said, DARCARS Lexus will pay a total of $892,671 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. 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.

DARCARS will also pay $700,000 in penalties.

The attorney general’s office opened an investigation in 2022 after receiving a consumer complaint claiming that DARCARS Lexus had added a more than $700 “sales commission charge” to their purchase without telling buyers. DARCARS Lexus began charging a sales commission fee in October 2021 and DARCARS BMW began charging the fee in August 2022, the statement said. 

While sales commission fees are typically understood to be paid directly to the salesperson, the fees that the DARCARS dealers charged never went to the employee making the sale, the statement 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,” said Attorney  General Letitia 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.” 

In addition, the attorney general said, DARCARS misleadingly added a bundled aftermarket product known as “DARCARS Assurance” to its sales and lease agreements without properly informing consumers.

In addition to reimbursements, DARCARS has stopped charging sales commissions and will clearly disclose all future fees and any add-on products or services to consumers, the attorney general said. It is also banned from offering or selling DARCARS Assurance or any similar “junk bundle” in New York, the attorney general’s office said. 

James asks any consumers who may have been affected by deceptive or fraudulent lease buyout practices to file a consumer complaint online at dos.ny.gov/file-consumer-complaint.