The Problem
Every day, double-dealing by automobile brokers costs New York consumers hard-earned cash. Even worse, many consumers face the severe risk of identity theft from their dealings with a virtually unregulated brokering industry. New York legislators must act today to protect consumers by requiring brokers to be transparent and follow modern privacy protection rules.
Why New York Needs Broker Regulation
Several months ago, Queens District Attorney Melinda Katz brought identity theft and grand larceny charges against an auto broker for an alleged $350,000 fraud that ruined the credit of several New York consumers. The broker allegedly stole the consumers’ identities to acquire a dozen vehicles and start his very own rental car company. Sadly, the victims were non-English-speaking New Yorkers, the very people that brokers claim to champion.
For years, our coalition of labor unions and automobile dealer associations have warned policymakers that loose regulation in the auto brokering industry would lead to this. GNYADA has identified over 800 brokers that advertise in the Metro New York area, and nearly all of them ignore some aspect of state law. A small fraction has registered with DMV, far fewer have obtained a surety bond to cover their liabilities, and we have found that none of them adhere to broker disclosure and Attorney General advertising guidelines.
But for a random car accident on a New York City highway, authorities would never have discovered the swindle in Queens. And since brokers operate virtually unregulated, there’s no telling how many similar cases go unnoticed each day.
What might be even more costly to New Yorkers is that brokers rarely work in the consumer’s best interest. Instead, brokers operate essentially as a front for an automobile dealer that pays the broker the most. Many brokers get paid thousands and thousands of dollars each month in exchange for funneling a preferred dealer business. But customers often never know about these arrangements, much less how much a dealer pays their broker. These arrangements deprive consumers of the opportunity to negotiate even lower vehicle prices.
Ultimately, it’s about how much the broker can get paid and not how much the broker can save their consumer. That must end.
The Way to Solve It
Buying or leasing a car is one of, if not the most, expensive transactions many consumers will ever experience. And they almost always involve consumers’ most private financial information. That is why New York needs rules for auto brokers that match the sensitivity and gravity of these transactions.
Our coalition of labor unions and automobile dealer associations does not seek to end brokering, though some states have banned it. Rather, we urge you to pass A.1932-A (Carroll)/S.4332 (SAVINO) to protect consumers by bringing much-needed transparency and accountability to the brokering industry.
THIS BILL ACHIEVES THESE GOALS BY:
One
Requiring brokers to perform real work for their customers by soliciting offers from At least three dealers
Two
REQUIRING BROKERS TO FOLLOW CONSUMER PROTECTION RULES THAT ARE STANDARD IN THE AUTOMOTIVE RETAIL INDUSTRY
Three
PROTECTING NEW YORK STATE BUSINESSES AND THE TENS OF THOUSANDS OF UNION WORKERS THEY EMPLOY
Four
CLARIFYING ADVERTISING and disclosure RULES so consumers have all the information they need to get themselves the best deal
Other Benefits of the Legislation
For decades, dealers and unions have continually bargained in good faith to provide for thousands and thousands of middle-class careers. But all of this is at risk because of today’s auto broker industry. This bill will level the playing field.
Weak regulation of auto brokers has largely caused these problems. New York brokers, unhindered by government regulations, constantly undercut New York dealers that adhere to far more consumer protection rules. As a result, brokers easily destroy dealers’ economic viability, costing many workers, oftentimes unionized workers, their jobs.
The only businesses today’s brokering industry help are the brokers themselves. Brokers employ very few people, invest nothing in their communities and offer absolutely no vehicle technician services, even for essential warranty and recall repairs. Our franchised dealers employ tens of thousands of people, make hundreds of millions of dollars in capital investments and local charitable contributions, and pay even more in state and local taxes.
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Dear, Majority Leader Stewart-Cousins and Deputy Majority Leader Mike Gianaris:
I am writing to you to ask for your urgent attention to the Automobile Broker Bill (S4332-A), which stalled in the Senate at the end of this year’s legislative session.
The Automobile Broker Bill is a crucial piece of legislation that will have a tremendous impact on the auto dealer industry in New York. Not only will this bill help to stave off unscrupulous brokers who continue to circumvent the strict regulation that Auto Dealers adhere to, but it will also prevent bad actors from ripping off consumers and revealing sensitive, personal information.
As a member of the Greater New York Automobile Dealers Association (GNYADA), a trade association of 425 franchised new car dealers in the New York metro area, I join the members of UAW Local 259, Teamsters Local 202, and USWU Local 355, in support of this bill and the and the 120,000 auto-retail jobs it will protect. I urge you to promptly reconsider this bill and bring it to the Senate floor for a vote.
Thank you for your attention to this issue.
Dear, Majority Leader Stewart-Cousins and Deputy Majority Leader Mike Gianaris:
I am writing to you to ask for your urgent attention to the Automobile Broker Bill (S4332-A), which stalled in the Senate at the end of this year’s legislative session.
The Automobile Broker Bill is a crucial piece of legislation that will have a tremendous impact on the auto dealer industry in New York. Not only will this bill help to stave off unscrupulous brokers who continue to circumvent the strict regulation that Auto Dealers adhere to, but it will also prevent bad actors from ripping off consumers and revealing sensitive, personal information.
As a member of the Greater New York Automobile Dealers Association (GNYADA), a trade association of 425 franchised new car dealers in the New York metro area, I join the members of UAW Local 259, Teamsters Local 202, and USWU Local 355, in support of this bill and the and the 120,000 auto-retail jobs it will protect. I urge you to promptly reconsider this bill and bring it to the Senate floor for a vote.
Thank you for your attention to this issue.
About GNYADA
Our Mission
GNYADA offers a unique array of services to franchised new vehicle dealerships to ensure that each individual showroom and service department operates efficiently and effectively. Other services, such as our government relations/advocacy program, aim to assist the entire industry.
Dealer Helpline
- Assistance from legal professionals
- Answers to questions on local, state and federal laws
- Help securing DMV dealer licenses
Field Visits
- On-site inspection of dealership facilities for compliance with OSHA, privacy, and environmental regulations
- Complimentary posters and required disclosures (i.e. labor law posters)
- Verified Information and immediate answers to specific questions
Job Bank
- Provides resumes of potential employees with dealership experience
- Placement of more than 150 candidates each year
Education
- The Center for Automotive Education and Training (CAET), a state of the art facility, provides more than 100 in-house courses and seminars to keep your employees on the cutting edge.
- GNYADA’s education programs cover every aspect of the dealership business. We continue to add new seminars and update existing ones to reflect the changes taking place in our industry.
Employee Relations Plan
- Unlimited consultation on employment laws and regulations
- Access to counsel and legal representation
- Customized employee handbooks
- Annual labor law seminars
- Handy reference guides
DMV-DIRECT
- Largest vehicle title and registration service in New York State
- Personalized service to meet each dealer’s needs:
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- Title & Registration Processing
- Duplicate Titles
- Out of State Titles
- Daily Pick-up Services
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Insurance Brokerage
- Comprehensive, competitively priced health and disability insurance
- Choice of carriers and plans
- COBRA administration at no additional cost
- More than 60 years experience tailoring programs to our members’ needs