FTC's Actions and Lawsuits Against Multistate Nissan Dealers in Canada
FTC's Actions and Lawsuits Against Multistate Nissan Dealers in Canada
Posted on August 17, 2023
As part of an ongoing effort to address racial discrimination and deceptive practices, Napleton, a well-known auto dealer group based in Illinois, faces legal action from the Federal Trade Commission (FTC) and the State of Illinois. This case has made history, resulting in a landmark $10 million judgment against the company.
The allegations against Napleton center around eight dealerships owned by the group. It is claimed that these dealerships added illicit charges for unpopular add-on products, such as payment insurance and paint protection. Even though customers explicitly declined these additions during negotiations or agreed to prices that did not include these fees, they were still forced to pay hundreds or even thousands of dollars for them.
According to the filed complaint, a staggering 83% of buyers from these dealerships were victims of unauthorized junk fees or were deceived into accepting them. The impact of these charges is significant, with one consumer in particular reporting being hit with nearly $4,000 in additional fees, despite already making a substantial down payment at an Arlington Heights dealership in Illinois.
The complaint also highlights racial discrimination within Napleton's financing practices, mainly targeting Black consumers. Dealership employees were given the power to inflate loan costs by raising interest rates or adding extra charges to the final contract. Research indicates that, on average, Black customers were charged an extra $190 in interest and an additional $99 for similar add-ons compared to non-Latino White customers in similar situations.
As part of the settlement, $9.95 million of the $10 million judgment will provide financial relief to affected consumers. Furthermore, Napleton will be required to establish a comprehensive fair lending program that includes restrictions on additional interest charges they can impose on customers. The settlement also mandates that consumers give explicit and informed consent for any charges while also prohibiting misrepresentations of costs or terms related to car purchases, leases, or financing.
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