Illinois dealer group to pay $10 million to charge illegal fees

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Image for article titled Illinois dealership group to pay $10 million for adding illegal fees and services to customer contracts

Picture: Naples Automotive Group

Dealer fees are the easiest way to scam customers out of money. Sales contracts are often long and most people don’t read everything. The excitement of a new car leads them to sign on the dotted line and look for the keys. But charging these fees has caught up with some people, like CBS News reports that an Illinois-based dealership group will have to pay $10 million to settle a case alleging it charged customers “unwanted fees.”

The group of dealers, Naples Automotive Group of Oakbrook Terrace, Illinois, manages dealerships in several states. In March, the group was hit with a deceptive practice complaint by the FTC. The complaint accuses the dealership of adding everything from GAP insurance to paint protection to customer sales contracts without their knowledge:

A survey cited in the complaint showed that 83% of dealership buyers were charged unwanted fees for additions without permission or as a result of deception. A consumer named in the complaint reported that the dealership in Arlington Heights, Illinois charged him almost $4,000 in additional fees after paying a similar amount as a deposit.

How could they sneak these things in without customers knowing? Long service contracts and exhausted customers. After lengthy negotiations and customers refusing the add-ons or services the dealer was trying to offer – and confirming the prices without the crap they tried to sell – the dealerships were putting those same services back into the contracts. These contracts would comprise more than 60 pages according to the FTC.

It all gets better with a little touch of discrimination. Napleton is also accused of charging black customers more interest than white customers:

The complaint also alleges that Napleton dealerships discriminated against black consumers in financing the purchase of vehicles. Napleton employees had wide latitude to increase the cost of a consumer loan by increasing the amount paid in interest or adding additions to the final contract.

According to the complaint, the dealerships’ black customers were charged about $190 more in interest and paid $99 more for similar add-ons than non-Latino white customers in the same situation.

Napleton has now agreed to settle the lawsuit for $10 million. While the group have denied everything, they claim they are settling “to avoid the disruption of an ongoing conflict”. Yes of course. The FTC says $9.9 million of the money will go directly to consumers for relief.

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