Wed. Dec 4th, 2024
FTC Takes Action Against Auto Dealer Group Asbury Automotive for Discriminating Against Black and Latino Consumers and Charging for Unwanted Add-Ons

The Federal Trade Commission is acting against a large automotive dealer group, Asbury Automotive, for systematically charging consumers for costly add-on items they did not agree to or were falsely told were required as part of their purchase. The FTC also alleges that Asbury discriminates against Black and Latino consumers, targeting them with unwanted and higher-priced add-ons.

In an administrative complaint, the FTC alleges that three Texas dealerships owned by Asbury that operate as David McDavid Ford Ft. Worth, David McDavid Honda Frisco, and David McDavid Honda Irving, along with Ali Benli, who acted as general manager of those dealerships, engaged in a variety of practices to sneak hidden fees for unwanted add-ons past consumers. These tactics included a practice called “payment packing,” where the dealerships convinced consumers to agree to monthly payments that were larger than needed to pay for the agreed-upon price of the car, and then “packed” add-on items to the sales contract to make up that difference.

“The FTC will continue to crack down on illegal hidden fees and discrimination, which have no place at car dealerships,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Like the Combating Auto Retail Scams (CARS) Rule, today’s action underscores our commitment to protecting consumers shopping for cars and leveling the playing field for honest dealers.”

Numerous consumers complained about Asbury’s practices. Consumers reported being charged thousands of dollars without their knowledge for add-ons that range from supposedly protective chemical coatings and service contracts to life and disability insurance policies, according to the complaint.

While some consumers reported that salespeople never discussed these products during the sales process, others said that they specifically declined these products only to find they were added on without consent. The FTC says that Asbury’s sales and financing process made it difficult, if not impossible, for consumers to know they were being charged for these add-ons, with consumers being asked to sign documents on electronic devices that showed only the places where they should sign and not the full documents. In other cases, consumers who noticed the add-on charges were falsely told they were mandatory.

A survey of customers across the dealerships showed that as many as 75 percent of consumers reported that they were charged for add-on products and services they did not authorize or were falsely told were required.

In addition, according to the complaint, company documents show that the dealerships treated Black and Latino consumers differently from non-Latino White consumers, charging them hundreds of dollars extra on average for add-ons – including those add-ons for which they were charged without consent. The complaint alleges that there was no non-discriminatory reason for these higher costs.

This happened in financed transactions across each of the dealerships, with one charging Black consumers, on average, $298 more for the same add-ons, and Latino consumers, on average, $214 more for the same add-ons than non-Latino White consumers.

The complaint alleges that Asbury Auto Group and the three dealerships, along with Benli, violated the FTC Act and the Equal Credit Opportunity Act.

The Commission vote to issue the administrative complaint was 5-0. Commissioner Melissa Holyoak issued a statement. Commissioner Andrew Ferguson issued a statement.

 

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

The staff attorneys on this matter are Jamie Brooks, James Doty, Dan Dwyer, and Sarah Abutaleb of the FTC’s Bureau of Consumer Protection.

Official news published at https://www.ftc.gov/news-events/news/press-releases/2024/08/ftc-takes-action-against-auto-dealer-group-asbury-automotive-discriminating-against-black-latino

The post FTC Takes Action Against Auto Dealer Group Asbury Automotive for Discriminating Against Black and Latino Consumers and Charging for Unwanted Add-Ons first appeared on RSVTV news.

originally published at Finance - RSVTV news