A.G. SCHNEIDERMAN SUES TO STOP USED CAR LOAN BROKER THAT DECEIVED NUMEROUS MOHAWK VALLEY CONSUMERS

Car Loan Broker Illegally Required Mohawk Valley Customers to Purchase Unnecessary Extended Warranties to Qualify for Car Loan

Schneiderman: My Office will Hold This Company Responsible for Repeatedly Preying on Local Consumers Desperate for Transportation

UTICA - Attorney General Eric T. Schneiderman today announced that his office will file a lawsuit against One Source Networking, of Auburn, New York, for using deceptive business practices against hundreds of Mohawk Valley consumers. The company and its owner, Sara Fagan, are accused of repeatedly and persistently deceiving customers by requiring them to purchase an extended warranty in order to qualify for a vehicle loan. The lawsuit is seeking restitution and civil penalties.

"One Source Networking took advantage of desperate Mohawk Valley consumers who needed cars to get to and from work," said Attorney General Schneiderman. "This company has taken customers for a ride, repeatedly deceiving them into paying more for loans than necessary. The message we are sending today is clear: If you're an unscrupulous business who preys on an unsuspecting public, this office will go after you."

When customers with poor or limited credit history sought to purchase vehicles at used car dealerships in the Mohawk Valley or Central New York regions, the dealers would frequently refer them to one of a number of financing companies, including One Source Networking. One Source Networking, is a third party car loan broker. On its website it advertises that it provides "fast, easy, no hassle credit for consumers who have been bankrupt or have poor credit."

The Attorney General's investigation over the course of several months uncovered hundreds of instances where One Source loan processors falsely stated to customers that loans could only be obtained if they also purchased an extended warranty. One Source charged $1,995 for non-four wheel drive vehicles or $2,495 for four-wheel drive vehicles when the actual cost of the warranty was significantly less. This deceptive practice unnecessarily inflated the size of the loan, the amount of the sales tax to be paid on the loan, and, in many cases, the amount of time it would take pay the loan back. In a few instances where consumers refused to purchase the extended warranty, the company imposed a previously undisclosed $495 fee.In addition, the company falsely claimed that the fee was imposed by, and would be paid to, the car dealership that would not complete the sale without payment.

Hundreds of customers ended up paying more to finance a used car than they had planned or budgeted for. The Attorney General's investigation found that One Source Networking targeted those who were not able to obtain credit or had poor credit ratings, including:

A young couple from Oneida County, newly engaged and just starting out was overcharged by more than $2,000.

A medical intern from Oneida County, who works long hours and various shifts, needed a reliable car to and from the medical facility where she is employed. She is now paying several thousand dollars more than she had agreed to.

A marina-mechanic from Madison County, whose place of employment is 50 miles away at Skaneateles Lake needed a car to get to and from work each day. He is now paying at least $2,000 over the original price of his vehicle.

The case against One Source Networking is being handled by Assistant Attorney General In-Charge of the Utica Regional Office, Joel Marmelstein, with the assistance of Investigator Joseph Kelly.

Auto Warranties, Routine Maintenance, and Repairs: Is Using the Dealer a Must?

If you own a car, you know how important it is to keep up with routine maintenance and repairs. But can a dealer refuse to honor the warranty that came with your new car if someone else does the routine maintenance or repairs?

The Federal Trade Commission (FTC), the nation's consumer protection agency, says no. In fact, it's illegal for a dealer to deny your warranty coverage simply because you had routine maintenance or repairs performed by someone else. Routine maintenance often includes oil changes, tire rotations, belt replacement, fluid checks and flushes, new brake pads, and inspections. Maintenance schedules vary by vehicle make, model and year; the best source of information about routine scheduled maintenance is your owner's manual.

What is a warranty?
A warranty is a promise, often made by a manufacturer, to stand behind its product or to fix certain defects or malfunctions over a period of time. The warranty pays for any covered repairs or part replacements during the warranty period.
Do I have to use the dealer for repairs and maintenance to keep my warranty in effect?

No. An independent mechanic, a retail chain shop, or even you yourself can do routine maintenance and repairs on your vehicle. In fact, the Magnuson-Moss Warranty Act, which is enforced by the FTC, makes it illegal for manufacturers or dealers to claim that your warranty is void or to deny coverage under your warranty simply because someone other than the dealer did the work. That said, there may be certain situations where a repair may not be covered. For example, if you or your mechanic replaced a belt improperly and your engine is damaged as a result, your manufacturer or dealer may deny responsibility for fixing the engine under the warranty. However, according to the FTC, the manufacturer or dealer must be able to demonstrate that it was the improper belt replacement — rather than some other defect — that caused the damage to your engine. The warranty would still be in effect for other parts of your car.

Will using 'aftermarket' parts void my warranty?

No. An 'aftermarket' part is a part made by a company other than the vehicle manufacturer or the original equipment manufacturer. Simply using an aftermarket part does not void your warranty. The Magnuson-Moss Warranty Act makes it illegal for companies to void your warranty or deny coverage under the warranty simply because you used an aftermarket part. Still, if it turns out that the aftermarket part was itself defective or wasn't installed correctly, and it causes damage to another part that is covered under the warranty, the manufacturer or dealer has the right to deny coverage for that part and charge you for any repairs. The FTC says the manufacturer or dealer must show that the aftermarket equipment caused the need for repairs before denying warranty coverage.

Tips To Avoid Warranty Issues
Here's how to get the most out of your vehicle's warranty:

Read your warranty. Often bundled with your owner's manual, the warranty gives a general description and specific details about your coverage. If you have misplaced your owner's manual, look for it online. Check the "Owners" section of your manufacturer's website.

Be aware of your warranty period. If problems arise that are covered under the warranty, get them checked out before the warranty expires.
Service your car at regular intervals. This is a good idea in any case. But for the sake of keeping your warranty intact, follow the manufacturer's recommended service schedule. Details are in your owner's manual.

Keep all service records and receipts, regardless of who performs the service. This includes oil changes, tire rotations, belt replacement, new brake pads, and inspections. Create a file to keep track of repairs; it will come in handy if you have to use your warranty. If you ever have a warranty claim and it appears that you did not maintain your vehicle, your claim could be denied.

Complain. If you think a dealer's service advisor denied your warranty claim unfairly, ask to speak with a supervisor. If you still aren't satisfied, contact the manufacturer or go to another dealer. You also may wish to file a complaint with your state Attorney General, local consumer protection office, local Better Business Bureau, or the FTC.

For More Information
Visit ftc.gov for free information on buying, financing, leasing, renting and maintaining vehicles.

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them.

To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.