An Illinois-based car dealership has agreed to a $10 million settlement with the Federal Trade Commission and the Ilinois Attorney General’s office after charging Black customers more for financing during purchases.
According to an FTC release, Ed Napleton Automotive, located in Oakbrook Terrace, Illinois, agreed to the settlement Friday after a complaint was filed against nine dealerships owned by Napleton Automotive in Illinois, Florida, Pennsylvania, and Missouri.
The complaint alleged the dealership group charged thousands of customers “hundreds or thousands of dollars” for additional charges, including “payment insurance” and “paint protection,” without informed consent. According to the FTC release, the complaint adds Black customers were charged up to $190 more in interest and $99 more in similar add-ons for “similarly situated” non-Latino white customers.
The FTC release states the dealerships would add the fees after hours-long negotiations and “sneak junk fees for add-on products and services into customer contracts,” despite customers declining the add-ons.
“Working closely with the Illinois Attorney General, we are holding these dealerships accountable for discriminating against minority consumers and sneaking junk fees onto people’s bills,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release.
“Especially as families struggle with rising car prices, dealerships that cheat their customers can expect to hear from us.”
Ed Napleton Automotive was founded in 1951 and has 51 dealerships across eight states. Dealerships in Georgia, Indiana, Minnesota, and Wisconsin were not involved in the settlement. Napleton dealerships involved in the settlements included five dealerships in Illinois, four in Florida, one in Pennsylvania, and one in Missouri.
In a statement Friday, a spokesman for the Napleton group denied all wrongdoing despite the allegations and settlement.
“The Ed Napleton Dealership Group has resolved disputed claims made by the Federal Trade Commission and the Illinois Attorney General’s office,” spokesperson Tilden Katz said. “We made this decision to avoid the disruption of an ongoing dispute with the government. As a result, we reluctantly determined that it was in our best long-term business interests to resolve these matters.”
According to the FTC, a survey showed 83% of buyers from the dealerships named were charged junk fees for add-ons without authorization.