Nissan Class Action Filed over Deceptive Service Contracts

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A class action lawsuit alleges that vehicle service contracts often sold by Nissan car dealerships contain illegal provisions and lack disclosures required by New Jersey consumer protection laws.

The complaint claims that Nissan North America Inc. and other Nissan companies violate consumer protection laws by having their vehicle service contracts contain “illegal, null and void” provisions that “is part of a fraudulent and unconscionable scheme to deter and prevent consumers such as Plaintiff from pursuing any remedies against Defendant and/or obtain monies from New Jersey consumers[.]”

According to the Nissan class action lawsuit, different service agreements are offered “for most New and Pre-Owned vehicles sold at Nissan and Infiniti dealerships in New Jersey,” and provide services such as certified pre-owned wraps, prepaid maintenance, guaranteed auto protection, key replacement, theft protection, paintless dent repair, and lease wear and tear.

Plaintiff RoseAnn Romeo alleges that she purchased a new Nissan Altima 2.5 in September of 2015. At the same time, Romeo purchased a vehicle service contract from Nissan for $607.

The Nissan deceptive vehicle service contract class action claims that these pre-printed form contracts violate the New Jersey Truth in Consumer Contract, Warranty and Notice Act, the New Jersey Service Contract Act, and the New Jersey Consumer Fraud Act in multiple ways.

First, the agreements fail to properly disclose: who will provide the services under the contract; how consumers can make a claim for services; how to cancel the contract, including how Nissan is obligated to provide a credit or refund within 45 days of cancellation; and whether or not the service contract is insured. In addition, the complaint asserts that Nissan charges a $50 processing fee that is illegal under New Jersey law.

Finally, Nissan’s service agreements have a general statement that some services may not be available under individual state law, but do not properly disclose to New Jersey consumers which provisions do or do not apply in the state, the plaintiff claims.

The class action complaint argues that New Jersey consumer protection laws provide extra penalties for service contracts or other agreements that contain illegal provisions. The purpose behind those statutes is that too many contracts “contain provisions which clearly violate the rights of consumers,” which is a problem because “even though these provisions are legally invalid and unenforceable, their very inclusion in a contract, warranty, notice or sign deceives a consumer into..fail[ing] to enforce his rights.”

Romeo seeks to represent a Class of all persons since July 16, 2014, who were offered, presented, or entered into any vehicle service contract in New Jersey by Nissan or its agents. The class action requests restitution, a minimum statutory penalty of $100 to each consumer, and/or treble damages for anyone who paid for a Nissan vehicle service contract.

The class action lawsuit also seeks a court order prohibiting Nissan from using its vehicle service contracts in their current form, and requiring Nissan to provide notice to all purchasers that certain portions of their vehicle service contracts are illegal in New Jersey.

Romeo is represented by Richard Grungo, Jr., and William A. Colarulo, Jr., of Grungo Colarulo, LLC.

The Nissan Deceptive Vehicle Service Contract Class Action Lawsuit is Roseann Romeo v. Nissan North America Inc., et al., Case No. 1:16-cv-01623, in the U.S. District Court for the District of New Jersey, Camden Vicinage.