🔒Manchester City Nissan to pay $4M to settle FTC, state junk-fee claims

Manchester City Nissan and four of its owners and managers will pay $4 million to settle federal and state allegations that they charged customers to “certify” used cars already advertised as certified and added optional products to financing contracts without permission.

U.S. District Judge Vernon D. Oliver approved the stipulated order Aug. 19, directing the clerk to enter judgment and close the case. It resolves a lawsuit the Federal Trade Commission and Attorney General William Tong filed in January 2024 against Chase Nissan LLC, which does business as Manchester City Nissan.

Named alongside the dealership are Patrick Dibre and Refaat “Brian” Soboh, who signed on behalf of the entities that own the store, and managers Michael Hamadi and Aiham Alkhatib. The defendants neither admitted nor denied the allegations.

The judgment is in favor of the state. The defendants’ attorneys are holding the money in escrow, according to the order. The first $2 million is due within seven days of entry, followed by two $1 million payments at five and 10 months.

Tong’s office has sole discretion over how the money is used for restitution and redress. Any remaining funds will go to the state’s General Fund.

“Manchester City Nissan systematically ripped-off Connecticut customers through needless, unauthorized junk fees,” Tong said.

The FTC and state alleged that the dealership’s own records showed customers were routinely charged thousands of dollars in unlawful fees. Some buyers were told they had to pay to certify vehicles the dealership had advertised as certified pre-owned, regulators said. They also alleged that charges such as total loss protection were added to financing agreements without customers’ knowledge or authorization.

The settlement follows a partial loss for the dealership in March, when U.S. District Judge Janet C. Hall, who handled the case before it was transferred to Oliver in June, granted the plaintiffs summary judgment on eight counts, including claims involving price advertising. She left the amount of any award to be determined at trial.

The parties then spent the spring in settlement talks before Magistrate Judge Thomas O. Farrish, including an eight-hour mediation session in May that ended without an agreement. They reached a settlement July 15.

Two other individuals named in the 2024 complaint, Matthew Chmielinski and Fred Mojica, settled separately last October. Hall entered judgments of $4.89 million against each, a figure the parties stipulated represented consumer injury, but suspended the judgments based on the men’s sworn financial statements.

The money would become due only if the state establishes that either man misstated his assets or violated the order.

The order permanently bars the remaining defendants from misrepresenting the cost of buying, financing or leasing a vehicle, whether a vehicle is certified or carries a limited manufacturer warranty, and whether a charge is optional or authorized.

When presenting a figure a customer might pay, the defendants must also disclose the maximum total price, displayed more prominently than other pricing information, excluding certain government-required charges.

Connecticut dealerships also must list any document or conveyance fee separately and next to the total price.
Every charge must receive the customer’s express, informed consent.

The defendants must retain records, including the “pencil, four square, or worksheet” forms salespeople use to negotiate vehicle purchases.

The FTC voted 2-0 to approve the order.