A multi-state auto dealership group will pay $10 million to settle a lawsuit alleging it charged customers hidden fees for unwanted add-on products and discriminated against Black customers by charging them higher financing fees and interest rates than non-Latino White customers.

The Federal Trade Commission and the state of Illinois took action against Napleton, a multi-state auto dealer group based in Illinois. The company will pay a record-setting monetary judgment for an FTC auto lending case.

The complaint against North American Automotive Services, Inc., also known as Ed Napleton Automotive Group, alleges that eight of its dealerships and the general manager of two Illinois dealerships illegally tacked on junk fees for unwanted “add-on” products such as payment insurance and paint protection. The illegal junk fees took hundreds or even thousands of dollars from customers. 

Dealerships listed in the complaint "often wait until the end of an hours-long negotiation process to sneak junk fees for add-on products and services into consumers’ purchase contracts, which often run as long as 60 pages". These fees would be added on despite the customer rejecting them, or having confirmed prices that did not include the add-ons. 

In other cases, consumers were told that add-ons were free or were a requirement to purchase or finance their vehicle, according to the complaint. 

The lawsuit also says the corporate defendants charged Black customers about $99 more for add-ons and $190 more for financing than they charged similarly situated non-Latino White customers. These charges were added as markups to the interest rates offered by the lenders working with the defendants. 

Under the terms of the settlement, the defendant would pay $9.5 million to provide monetary relief to consumers, and $50,000 will be paid to the Illinois Attorney General Court Ordered and Voluntary Compliance Payment Projects Fund.

The settlement requires the defendant to establish a comprehensive fair lending program, among other components, that will cap the additional interest markup they can charge consumers. Consumers will be charged only with express, informed consent, and prohibits them from misrepresenting the cost or terms to buy, lease, or finance a car or whether a fee or charge is optional under the settlement. 

The FTC urges consumers to know their rights when purchasing a car from the dealership. The public has access to an FTC staff report highlights some of the challenges people face while buying and financing vehicles. 

If you believe a dealership charged hidden fees or discriminated against you, please tell us at ReportFraud.ftc.gov.

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