Ed Napleton Automotive Group to pay $10 million to settle fraud, discrimination claims [The News-Gazette, Champaign-Urbana, Ill.]
News-Gazette (Champaign-Urbana, IL)
Apr. 6—OAKBROOK TERRACE — Ed Napleton Automotive Group has agreed to pay $10 million to settle a federal and state lawsuit in which some of its dealerships were accused of sneaking illegal junk fees onto customer bills and discriminating against Black customers by charging them more for financing.
Napleton's Auto Park of Urbana wasn't named in the lawsuit. The local dealership referred a query from The News-Gazette to the chain's chief communications officer, who did not return the call Tuesday.
The action was filed by the Federal Trade Commission and the state of Illinois, and it alleged eight Napleton dealerships and the general manager of two Illinois dealerships illegally tacked on junk fees for unwanted add-on parts such as payment insurance and paint protection, costing individual consumers hundreds to thousands of dollars.
The complaint also alleged Black borrowers, on average, were charged about $190 more in interest and about $99 more on average for add-ons than non-Latino White borrowers.
"Disparities in charges between Black consumers and non-Latino White consumers are statistically significant and cannot be explained by factors related to underwriting risk or credit characteristics of the applicants," the lawsuit states.
In addition to Oakbrook Terrace-based Ed Napleton Automotive Group, the defendants included eight Napleton dealerships — two in Illinois, four in Florida, one in Missouri and one in Pennsylvania.
The Illinois dealerships included Napleton's Elmhurst Kia/Acura in Elmhurst and Naplelton's Arlington Heights Chrysler Dodge Jeep Ram, along with the general manager of both, Hitko Kadric.
"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," said Samuel Levine, director of the FTC'sBureau of Consumer Protection. "Especially as families struggle with rising car prices, dealerships that cheat their customers can expect to hear from us."
A survey cited in the complaint found 83 percent of buyers from the dealerships were charged junk fees for add-ons "without authorization or as a result of deception," the agency said.
According to the complaint, the defendants "frequently lure consumers into their dealerships with low-advertised prices" and customers calling to confirm prices are told there won't be any fees beyond routine taxes and fees.
"After an often hours-long process, defendants present consumers with a stack of complex, highly technical documents," the lawsuit goes on to state. "Defendants then rush consumers through the closing process, which typically requires paperwork that is more than 60 pages deep and over a dozen signatures, simply indicating where to sign."
It also states that in numerous instances, the dealerships have inserted charges for add-on products without the consumers' informed consent, and extras are typically added to the amount financed and spread out over monthly payments, "making the added charges more difficult to detect."
The dealerships "have charged thousands of consumers hundreds to thousands of dollars each for such unauthorized, unwanted add-ons," the lawsuit states. "In the aggregate, defendants have charged over $70 million in unauthorized, unwanted add-ons since 2017."
In one case in Arlington Heights, the complaint states, a consumer's $4,000 down payment was used to cover add-ons of about the same price, "thus the consumers' down payment only covered the cost of the unauthorized charges, and he still owed the full cost of the vehicle."
In some cases, the complaint states, consumers were charged for add-ons they were told were free or had specifically declined.
"In numerous instances, defendants tell consumers that the purchase of add-on products is required to purchase or finance a vehicle, purportedly due to dealership or finance company policy," the lawsuit states. "In actuality add-on products are not required by the defendants' dealerships or financing companies."
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