In a bid to protect New York credit card holders from having to pay for services they don’t know about, the state’s Attorney General Eric Schneiderman has been working round the clock to get credit card companies to understand the state’s credit card laws. And if a credit card services provider knowingly or unknowingly breaches these rules, the AG won’t hesitate to close down such a company.
This was the case in 2015 when Credit Forget It was closed for violating New York state laws by charging upfront fees for services that should have guaranteed customers that their credit would be repaired. Between 2010 and 2015, Credit Forget It used illegal tactics to sell its contracts to more than 5,000 consumers. The company was taken to court, and in early 2015, a consent order issued that dissolved the company and prohibited its owners from offering credit card services elsewhere within the state.
More recently, the AG has been dealing with four car dealerships that offer similar credit repair services and credit theft protection illegally. While these four companies won’t be closed, they have been slapped with hefty fines which will send a serious warning to other dealers in the credit card business. According to reports obtained from the AG’s office, each of the dealerships will be required to pay up to $800,000 in restitution and $64,000 in penalties.
“This cannot be allowed to continue,” said the AG. “Consumers deserve to be treated with honesty and dignity. Using hidden fees as a tactic to get more from an unsuspecting card holder isn’t right.”
The four dealerships will be prohibited from a number of things including selling or offering to sell credit repair and identity theft services within the state.
Of the four, Plaza Dealerships with more than 1,600 affected customers will be hardest hit after they were asked to pay $800,000 in restitution and another $64,000 in penalties. Meanwhile Huntington Honda with 475 affected consumers will pay the least amount, $270,950 in restitution and another $30,000 in penalties.
The other two dealerships, Koeppel Auto Group and Manfredi Auto Group with 1,361 and 1,479 affected customers respectively will pay $500,000 in restitution and $50,000 in penalties, and $425,000 in restitution and $30,000 in penalties in that order.
It remains to be seen whether these dealerships can turn around their businesses by perhaps getting credit repair merchant accounts from providers such as eMerchantBroker.com to make their services more credible.