Car dealership agrees to $10M settlement after being accused of charging Black customers more

The Federal Trade Commission and Illinois attorney general’s office reached a record $10 million settlement with a car dealership accused of illegally adding fees and charging Black customers extra for financing on purchases, Chicago Tribune reported.

Authorities alleged Ed Napleton Automotive, a multistate dealership group, billed thousands of customers “hundreds or thousands of dollars” for add-on products including “paint protection” without their notified consent. Authorities announced the settlement agreement on Friday. It was also filed alongside the complaint in a federal court in Chicago.

Per the complaint, Black customers who sought the services of Ed Napleton Automotive were discriminated against as the company allegedly charged them an average of $99 more for add-on packages and $190 more in financing interest charges. White customers paid less.

“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,” the director of the FTC’s Bureau of Consumer Protection, Samuel Levine, said in a statement. “Especially as families struggle with rising car prices, dealerships that cheat their customers can expect to hear from us.”

But despite agreeing to the settlement, a spokesman for the Napleton group “vehemently” rejected the allegations. “The Ed Napleton Dealership Group has resolved disputed claims made by the Federal Trade Commission and the Illinois Attorney General’s office,” Napleton spokesman 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.”

The family-owned dealership was founded in Illinois in 1931. The company, which has 51 dealerships in eight states, is regarded as one of the biggest auto groups in Illinois, Chicago Tribune reported. Eight Napleton dealerships were named as defendants in the complaint.

Per the details of the settlement, $9.95 million will be distributed to customers as relief while $50,000 will go to a special fund of the Illinois attorney general’s office for law enforcement and public education. The FTC will get in touch with customers who qualify for relief.