Queens Car Dealership Exploits Low-Income Customers: Department Of Consumer Affairs

ASTORIA, QUEENS — Major World, a used car dealership, is under investigation by the Department of Consumer Affairs for engaging in illegal practices to profit from low- and medium-income customers, according to a press release issued Thursday.

Complaints reported to the DCA show wide-ranging customer harm. The DCA asks that the dealership pay $2 million in compensation for customers and seeks the creation of a trust fund for those harmed by illegal practices. The three locations of the dealership also face the risk of losing their secondhand auto dealership licenses.

The investigation includes 30 customers who have filed a claim with the DCA, although that number is likely to be a small portion of customers harmed by Major World (DCA has received 114 complaints about the car dealership since 2014).

"Based on their lawsuit, the DCA has found a small number (30 to date) of the 10,000+ satisfied customers we serve annually. The number of complaints received by the DCA regarding Major World itself are a miniscule number (114 in 3 years by their count, a 99.62% satisfaction rate). Almost none of the complaints are about vehicle financing," Major World said in a statement on Monday.

The dealership allegedly lures customers, particularly immigrants with low proficiency in English, with promises of great payment options on used cars regardless of credit history or income level.

The DCA investigation has found that Major World provides false information regarding employment, income and rent on customers' credit applications. When customers receive high-interest loans that they would normally be unqualified for, they are left with overpriced and, sometimes, defective cars that they won't be able to pay for.

“As we look to combat the impact of crippling consumer debt in our borough and beyond, we must address irresponsible corporate behavior that is fueling the crisis. I thank DCA Commissioner Salas for taking decisive action against deceptive practices of dealerships preying on vulnerable consumer populations," said Brooklyn Borough President Eric L. Adams.

DCA provided a description of deceptive techniques that Major World has allegedly used. The dealership begins with targeting low- and medium-income individuals by using taglines such as "No credit is no problem" or "Buenos, Bonitos, Baratos" (meaning "Good, Pretty, Cheap"). Once the customer walks in to the store, Major World allegedly inflates the prices of the cars by claiming it installed valuable accessories that it in fact hasn't, according to the DCA. Next, it alters information on the credit applications to make it seem as if customers are more financially stable than they are, which leads customers to receive loans they cannot pay (in one example, Major World more than tripled a customer's income), according to DCA. Finally, the dealer fails to disclose full financial details, such as interest rates and finance charges, to the customer, DCA reports said.

DCA posits that Major World makes its customers sign documents in English after negotiating the terms in Spanish, the target customers' native language.

The investigation also showed that Major World fails to conduct safety inspection on its cars and sells "dangerously defective cars" (which often break down shortly after the purchase) to its customers.

According to the Federal Reserve Bank of New York, Americans had $1.2 trillion in outstanding auto debts in 2016, and auto debt is one of the fastest-growing household debt levels.

Lead image via Google Maps