The deceptive practice was first reported by 7 On Your Side at the beginning of the pandemic.
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Allegations involved overcharging customers thousands to purchase their car at the end of their lease, by tacking on a random fee on top of the residual value, or the pre-established price of the car at the end of their lease.
Eyewitness News brought the problem to the attention of the Attorney General James in March of 2022, but 7 On Your Side got its first complaint as far back as 2020.
Due to the rising price of cars during the COVID-19 pandemic, many New Yorkers chose to keep their leased cars, in lieu of turning them in and purchasing a more expensive vehicle.
After the initial report, viewers reached out saying they too were being charged miscellaneous fees, under all sorts of bogus names. 7 On Your Side took cameras undercover to expose their allegations.
On Thursday, the attorney general ordered the dealerships to audit all their deals and pay up.
The settlement requires car buyers to be reimbursed for fees that were overcharged between 2020-2023.
Joe Macaluso was charged almost $2,000 for what the dealer labeled a "Lemon Law Fee" when he bought out his lease from Nissan of Staten Island.
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That dealer agreed to pay back $282,255.61 in all, to 184 consumers, plus a $55,200 penalty.
"That's what happens when you're greedy!" Macaluso said.
Four other dealers also agreed to the settlement but admitted no wrongdoing.
According to James' office, Nissan of Kings in Brooklyn settled to pay $437,560.86 to 420 car buyers and a $147,000 penalty. Nissan of Queens settled to pay $608,347.83 to 276 of their customers and a $69,757 penalty. Baron Nissan in Greenvale will refund $204,656.89 to 186 car buyers, and a $51,190 penalty. And Nissan of Westbury will pay back $102,636.07 to 72 overcharged consumers and a $19,440 penalty. That's where 7 On Your Side went undercover with Taylor Brown of Long Island.
Back in 2022, Brown said he needed help.
"Who am I going to call? So, I called 7 On Your Side," he said.
He was quoted a whopping $5,000 upcharge to buy out his Altima for a "purchase and Tri-State Lemon Law Fee." At the time, a manager told us "every customer gets charged this."
Leticia James told us then, "We received a number of complaints and our Office of Consumer Protection is investigating and encourage each and every one of them to comply with the law, and get a good attorney."
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Macaluso, who was already paid his restitution after involving 7 On Your Side years ago, said he was happy for the other consumers.
"Nina, without you this would never have happened," Macaluso said.
We reached out to all five dealerships named in the settlement. Nissan of Westbury had no comment. The others did not return requests for comment except for Baron Nissan in Greenvale, New York.
In a statement provided to 7 On Your Side by General Manager, Brian Chabrier, he said, "We are happy to have resolved any issues raised by the Attorney General's Office and as one of Nissan's longest-tenured dealerships, we look forward to continue working with our long-standing customer base in the future."
Consumers entitled to restitution don't have to take any action to receive the payment as the checks are allegedly in the mail.
If you feel you've been defrauded in a deceptive or fraudulent lease buy out practice, you should file a consumer complaint with the New York Attorney General's office online.
You can find a link here.
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