Napleton Auto agrees to $10 million settlement in racial discrimination case
INDIANAPOLIS — The Federal Trade Commission said Friday it has reached a record $10 million settlement with Napleton, a major Illinois-based auto dealership group.
The FTC alleged that Napleton car dealerships in four states charged customers hidden fees for unwanted add-ons and discriminated against black customers by charging them higher finance charges and interest rates than non-Latino white customers. .
Napleton will pay $10 million to settle, millions of which will be distributed to customers, the FTC said.
The lawsuit says dealerships often slipped hundreds or thousands of dollars in illegal fees into auto finance documents they gave people to sign.
Dealerships charged customers for products like extended warranties and service plans — fees that were typically added to the financed amount and spread across monthly payments, so they were hard for consumers to track, the FTC says. .
Napleton dealers also falsely told people the add-ons were needed to buy or finance the vehicle, the lawsuit alleges.
The claims relate to eight of the Ed Napleton Dealer Group’s 51 dealerships in Florida, Illinois, Pennsylvania and Missouri.
No Indiana dealership is named in the lawsuit or settlement, although WRTV is aware of two dealerships that are part of the Ed Napleton dealership group – Napleton Kia of Fishers and Maserati of Indianapolis.
Last month, WRTV Investigates told you about a Napleton Kia of Fishers customer who alleged the dealership forged her signature on documents, including for a service plan she didn’t want.
PREVIOUS | Woman files lawsuit alleging dealership forged her signature
Jessica Poertner of Greenfield also said she would never have agreed to a $1,954 service plan with the dealership.
“Napleton Kia isn’t close for me to get an oil change or have my tires rotated,” she said.
Jessica Poertner’s lawsuit, which is still pending, against Fishers’ Napleton Kia alleges they violated Indiana’s Consumer Deceptive Sales Act and the federal Truth in Lending Act.
Napleton Kia of Fishers is not named in the lawsuit filed by the Federal Trade Commission.
The FTC lawsuit alleged that eight dealers violated Illinois’ consumer fraud and deceptive marketing practices law.
The FTC’s lawsuit against Napleton also says they charged black customers about $99 more for add-ons and $190 more for financing than they charged non-Latino white customers in the same situation. .
“Finance charges were added as mark-ups to interest rates offered by lenders working with defendants, resulting in higher costs for customers,” the FTC said in a statement.
A consumer named in the FTC lawsuit reported that an Arlington Heights, Illinois dealership charged him nearly $4,000 in additional fees after he paid a similar amount as a deposit.
Napleton denies any wrongdoing.
FULL STATEMENT TO WRTV:
“While we vehemently deny any wrongdoing, The Ed Napleton Dealer Group has resolved disputed claims made by the Federal Trade Commission and the Illinois Attorney General’s Office. We made this decision to avoid disruption of an ongoing dispute with the government. As a result, we have reluctantly determined that it is in our best long-term business interests to resolve these issues.
These regulations are the result of a three-year process where we ensured full transparency in government. Most of his claims were based on interpretations of statistical data and there were no actual findings of intentional wrongdoing.
The Napleton family has been in business for over 90 years, selling and servicing millions of vehicles. We are proud of our reputation and our trusted and proven relationship with our clients and are fully committed to transparency in all our dealings.
The unproven government claims relate to 8 of the Ed Napleton Dealer Group’s 51 dealerships. Dealers outside of the Ed Napleton dealership group bearing the Napleton name were never part of this investigation.
We have taken steps to implement additional safeguards to provide full transparency to our customers. We intend to continue to build on the trust we have worked so hard to create with the consuming public and look forward to building new relationships with generations of satisfied customers to come.
The defendants in the case are:
- North American Automotive Services, Inc., also doing business as Ed Napleton Automotive Group (Oak Brook, Illinois)
- Ed Napleton Elmhurst Imports, Inc., also doing business as Napleton’s Kia of Elmhurst/Ed Napleton Acura (Elmhurst, Illinois)
- Napleton’s Arlington Heights Motors, Inc., also doing business as Arlington Heights Chrysler Dodge Jeep Ram (Arlington Heights, Illinois)
- Hitko Kadric, general manager of the two Illinois-based dealerships
- North Palm Auto Park, Inc. of Napleton, also doing business as Northlake Chrysler Dodge Jeep Ram of Napleton (Lake Park, Florida)
- Napleton Enterprises, LLC, also doing business as Napleton’s South Orlando/Kissimmee Chrysler Dodge Jeep Ram (Kissimmee, Florida)
- Clermont Motors, LLC, also doing business as Clermont Chrysler Dodge Jeep Ram of Napleton (Clermont, Florida)
- North Palm Motors, LLC, also doing business as Northlake Kia of Napleton (North Palm Beach, Florida)
- Ellwood Motors, Inc. of Napleton, also doing business as Ellwood Chrysler Dodge Jeep Ram of Napleton (Ellwood City, Pennsylvania)
- Napleton’s Mid Rivers Imports, Inc., also doing business as Napleton’s Mid Rivers Kia (St. Peters, Mo.)
The settlement will also require Napleton to establish a comprehensive Fair Lending Program that, among other things, will cap the additional interest markup they can charge consumers, the FTC said in a statement.
The settlement also requires the auto dealership group to only charge consumers with express and informed consent, and prohibits them from misrepresenting the cost or terms of buying, leasing or financing a car, or if fees or charges are optional, the FTC said. .