Auto Lender Imposed Illegally Required Warranties

Auto loan applicationState officials in New York want an allegedly deceptive auto lender to pay back its customers for what attorneys say were unscrupulous demands on would-be buyers with poor or limited credit histories.

In a lawsuit filed on March 31, the New York Attorney General's office accuses One Source Networking, of Auburn, N.Y., and its owner, Sara Fagan, of deceiving used-car loan applicants by requiring them to purchase an extended warranty in order to qualify for a vehicle loan.

The problem, according to New York Attorney General Eric Schneiderman, is that One Source loan processors falsely stated to customers that loans could only be obtained if they also purchased an extended warranty, which cost the customers an additional $1,995 to $2,495. Such requirements are illegal, the attorney general's office said.In a few instances, when customers resisted the warranty, Schneiderman's investigators assert that One Source imposed a previously undisclosed fee of $495.

"This company has taken customers for a ride, repeatedly deceiving them into paying more for loans than necessary," Schneiderman said in a statement. "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."

An employee of One Source, at the company's Auburn, N.Y., office, told Consumer Ally that Fagan was unavailable, and, when asked to provide another representative who could speak to the press about the case, said the company had "no comment at this time."

According to Schneiderman's office, One Source's customers were people who were in the market for used cars. Dealerships in the Mohawk Valley region and Central New York would frequently refer these buyers to One Source Networking, a third-party car loan broker, that the attorney general's office said advertised ""fast, easy, no hassle credit for consumers who have been bankrupt or have poor credit."

Schneiderman's office believes hundreds of consumers were overcharged for loans in the case, which is pending in the New York courts.
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