NY Car Dealer to Pay $150,000 for Fraudulent Practices

Five Towns Mitsubishi lured customers with scratch-off cards

July 14, 2008

Five Towns • NY Car Dealer to Pay $150,000 for Fraudulent Practices • Consumer Complaints about Five Towns

New York Attorney General Andrew M. Cuomo says that a Nassau County auto dealer will pay consumers for persistently using misleading promotions intended to lure them into the dealership. The consumers, once baited into the dealership, were also subject to other fraudulent and unfair sales practices, Cuomo charged.

Five Towns Mitsubishi of Burnside Ave. in Inwood must pay $115,000 in restitution to consumers and $35,000 in penalties and costs to the state.

The Attorney General’s Nassau Regional Office received more than 50 complaints regarding Five Towns’ business practices. Consumers who believe they were defrauded by Five Towns are urged to contact the Attorney General’s Nassau Regional Office at 516-248-3301 by August 5, 2008.

“This dealership lured consumers to their business through a bogus offer but didn’t stop there,” said Attorney General Cuomo. “The business continued deceiving customers during their vehicle purchasing process. These acts defrauded hard-working Long Island residents who were only trying to get a good deal on a car. My office has secured restitution for wronged consumers and put strong preventions in place to keep the company from ripping off any more Long Island consumers.”

Five Towns, owned by Lester Wu, Vladimir Zana and Clara Shvartser, caused advertisements to be mailed to thousands of Nassau County consumers featuring a scratch-off ticket called Dash for Cash in which a consumer could win a cash prize, a free vehicle, a vacation, a free gas voucher or a $1,000 shopping spree.

A winning ticket contained three like symbols in a row but it did not explain, what, if anything, the consumer won. Instead, they had to bring the ticket to the dealership in order to claim the prize.

Once at the dealership, consumers found that nearly all of them had won the vacation or $1,000 shopping spree. However, the vacation and shopping spree prizes had minimal value due to either blackout periods or expenditure requirements, including shipping and handling costs.

Cuomo said that Five Towns also misled consumers by:

• Obtaining signatures on contracts and finance agreements from consumers who mistakenly believed that they were filling out paperwork for vehicles they had won as part of the Dash for the Cash sweepstakes

• Offering false discounts off the sales price of a vehicle by selling it at a higher retail sales price which essentially nullified the value of the discount offered

• Having consumers sign documents with blank sections for figures and terms, and then later filling them out with terms that were not agreed upon

• Failing to give all necessary documents to consumers at the time of purchase

• Promising consumers that they could refinance at a better interest rate after making several car payments, or promising to pay one or more months of the insurance payments for the vehicle – and then reneging on those agreements

• Inserting additional cost items without consumers’ knowledge or consent, including VIN etching, service warranties, theft deterrent systems, GPS devices and other expensive options.

Also, Five Towns repeatedly sold consumers used cars that had previously been used as rental cars without expressly notifying the consumers of their prior use, in violation of Vehicle and Traffic Law.

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