Complaint Accuses Car Dealer In Manchester Of 'Systematic Deception'

MANCHESTER, CT — Attorney General William Tong Thursday said he and the Federal Trade Commission are taking action against a local auto dealer — Manchester City Nissan — for "systematically deceiving consumers about the price of certified used cars, add-ons and government fees."

The dealership's owner and a number of key employees are also named in the complaint. Manchester City Nissan is located at 30 Tolland Turnpike in Manchester near the Vernon line.

In addition to deceiving customers, the 29-page complaint accuses the dealership of regularly charging them "junk fees for certification, add-on products, and government charges without the consumers' consent, sometimes costing them thousands of dollars in unwanted and unauthorized charges."

"The state of Connecticut also alleges that all these practices are deceptive or unfair under Connecticut law," Tong said.

He added, "(Thursday's) action sends a strong warning to any dealership engaging in these types of deceptive practices that misconduct will not be tolerated. Manchester City Nissan's egregious business practices appear to have violated multiple laws, and we're going to hold them accountable on behalf of all the consumers they deceived."

Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, said the action comes on the heels of the Commission's announcement of the Combating Auto Retail Scams, or CARS Rule.

"With this action against Manchester City Nissan, its top executives, and its managers, the commission and its partner, the State of Connecticut, continue to crack down on deceit and unfairness in the auto industry and once again makes clear that bait-and-switch tactics and hidden junk fees have no role in honest dealmaking."

Connecticut Department of Consumer Protection Commissioner Bryan T. Cafferelli said it also affects a staple of everyday life.

"A car is an essential resource for many families in our state. Taking advantage of that necessity to make more money from consumers by charging junk fees is wrong," he said. "We are happy to support the attorney general and our partners at the Federal Trade Commission in taking this action to stop and prevent these deceptive practices."

According to the complaint, Manchester City Nissan advertises numerous cars, including Nissan vehicles, as being "certified pre-owned," a term that refers to a used vehicle that has been inspected and repaired to the manufacturer’s specifications and comes with an extended warranty from the carmaker.

Nissan's rules prohibit dealers from charging a fee for certification beyond the price of the car," according to the complaint.

The dealership regularly tacked on a certification charge when consumers arrived looking to buy the advertised cars, according to the complaint. One example cited in the complaint described a consumer that wanted to purchase a certified pre-owned car advertised for $15,700, but then the dealer added a $5,295.65 "inspection fee" for a car it had already inspected.

According to the complaint, the dealership often charged consumers extra for an inspection or repair that has already occurred and then failed to report to Nissan that the certified car was sold, leaving consumers without the additional warranty that was promised in advertising.

According to the complaint, Manchester City Nissan frequently charged consumers for "bogus" add-ons they did not agree to pay for, like general asset protection (GAP), service contracts, maintenance contracts and total loss protection (TLP).

TLP, in particular, appeared in 90 percent of all sales by Manchester City Nissan, according to the complaint. One consumer, according to the complaint, negotiated a price of $20,500 for a Nissan Rogue Sport, but when she went to sign the sales contracts, her promised monthly payment had increased, which she attributed to a credit issue. Instead, she found that the dealership had tacked more than $7,000 in add-ons to the amount she financed for the car, according to the complaint.

The dealership regularly deceived consumers during the sales process about government-imposed taxes and fees, claiming that added fees were required by the government or inflating the actual government fees to register the car and keeping the difference as profit, according to the complaint. An example cited in the complaint said that Manchester City Nissan told one consumer that Connecticut registration and other state fees were $345, but they were instead $208.20.

The complaint charges Chase Nissan, which does business as Manchester City Nissan; its principals, Patrick Dibre and Refaat "Brian" Soboh; general manager Michael Hamadi; finance manager Aiham Alkhatib; and sales managers Matthew Chmielinksi and Fred "Freddy" Mojica with violating the FTC Act and the Connecticut Unfair Trade Practices Act.

The complaint was filed in the U.S. District Court for the District of Connecticut. The Commission files a complaint when it has reason to believe that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court, Tong said.

Manchester City Nissan released the following statement Thursday:

"At Manchester City Nissan, we treat our customers like family, as evidenced by our ranking as one of the top Nissan dealerships in New England in terms of customer satisfaction. Returning and referral customers are the lifeblood of any automobile dealership, and our success is driven by the trust our customers continue to place in us year after year. We dispute the claims in this lawsuit from the Federal Trade Commission — they do not reflect our company or our customers' experience, and we look forward to addressing the claims in Court. In light of the pending litigation, it would not be appropriate to comment any further at this time."