N.C. Used-Car Dealer, Finance Company Swap Fraud Suits
The legal battle between Security Auto Sales and Security Credit Corporation Inc. has reached the North Carolina Supreme Court, according to the Dunn, N.C. Daily Record.
BENSON, N.C. — The legal battle between Security Auto Sales and Security Credit Corporation Inc. has reached the North Carolina Supreme Court, according to the Dunn, N.C. Daily Record. The used-car dealership, formerly located in Benson but now closed, began doing business with Security Credit, which is based in nearby Smithfield, in April 2005. Each company is accusing the other of engaging in fraudulent business practices, and each is seeking compensatory damage awards.
Security Credit's lawyers claimed that Security Auto owners Michael S. Barefoot, his ex-wife, Franki Barefoot, and an associate, Eddie Snead, were partners in a scheme to defraud the lender and their customers. The suit alleges that the Barefoots and Snead rolled back odomoters, listed later-than-actual model years on applications and failed to disclose to both customers and Security Credit that several units were salvage vehicles. They are asking for $1.3 million in damages.
In turn, Barefoot's lawyers said that Security Credit and its owners, including N.C. state representative Leo Daughtry, the company's vice president, president David Lee and secretary/treasurer Kathy Conway, "fraudulently and intentionally intended" to close or cripple his business, make him lose his business license and ruin his business reputation, according to the Record. In addition to compensatory and punitive damages, Barefoot has asked for action under federal and state racketeering laws as well as North Carolina statutes concerning abuse of process, torturous interference with contractual business relations and breach of duty of good faith and fair dealing.
As of press time, the next court hearing has yet to be scheduled. The full text of the Daily Record article can be read here.
More F&I

The Psychology Behind Menus That Increase Add-On Sales
There is a science to crafting a menu that gives customers confidence in the choices presented, and moving the process outside the F&I office can further boost results.
Read More →
Why Your F&I PVR Is Misleading You
Here’s a handy checklist of the numbers to track in 2026 instead.
Read More →
Auto Consumer Anxiety Presents Opportunity
A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.
Read More →
Humble and Hungry: 12 Rules for an F&I Life
Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.
Read More →
Focus on the Opening
F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.
Read More →
F&I Reaches for the Sky
The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.
Read More →
What Market Timing Mistakes Mean for Your Reinsurance Program
For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.
Read More →
The 90/10 Rule
In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.
Read More →
Your Office Is Talking
What’s the atmosphere saying about you to your customers? You can make minor adjustments and additions that transform your space into one that creates trust with the people on the other side of the desk.
Read More →
F&I Training Fundamentals
How can auto dealerships help F&I managers fulfill their vital role in the most effective ways? Industry expert Rick McCormick shares his insights on the best ways to train these professionals and help them maintain good habits.
Read More →