Auto Lender Imposed Illegally Required Warranties

State 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.