Buyers Get FTC Refunds in Napleton Auto Case
Agency alleged that 8 dealerships charged illegal junk fees, discriminated against black buyers.
FTC complaint alleged in part that the eight Napleton dealerships charged black buyers more in interest and add-on fees.
IMAGE: Getty Images/dragana991
The Federal Trade Commission will refund consumers $9.8 million from a settlement with Napleton automotive group over junk fees and discrimination against black customers through higher financing charges.
The refunds will be distributed among more than 66,000 checks that average $147 apiece.
The complaint was filed in March against Napleton Automotive Group, alleged that eight of its dealerships and the general manager of two Illinois dealerships added junk fees for unwanted products, including paint protection, costing buyers up to thousands of dollars. The FTC said the dealerships would often add the fees late in contract talks to add the fees to the buyers’ contracts.
The FTC also alleged that the dealerships had “wide latitude” to jack up the cost of black borrowers’ loans via interest or add-ons, typically $190 more in interest costs and $99 more in add-ons than similarly situated non-Hispanic white buyers.
The settlement also requires the defendants to establish a fair lending program capping the additional interest markup charged to customers and to charge buyers only with express informed consent.
Originally posted on Auto Dealer Today
More Auto Finance
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →