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Napleton Auto’s junk fees, discriminatory practices result in $9.8M to customers

Eight company dealerships tacked on junk fees for unwanted “add-on” products such as payment insurance and paint protection

Chicago—The Federal Trade Commission is sending payments totaling more than $9.8 million to consumers who were harmed by Illinois-based Napleton Automotive Group’s junk fees and discriminatory practices. Napleton paid $10 million to settle a lawsuit brought by the FTC and the State of Illinois, a record-setting monetary judgment for an FTC auto lending case, in March.

According to the joint complaint, eight of the company’s 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, costing consumers hundreds and thousands of dollars. The complaint also alleged that Napleton discriminated against Black consumers by charging them more for add-ons and financing. The agency is sending 66,355 checks, averaging $147 each.

The defendants in the case were:

  • North American Automotive Services, Inc., also doing business as Ed Napleton Automotive Group (Oak Brook, Ill.)
  • Ed Napleton Elmhurst Imports, Inc., also doing business as Napleton’s Kia of Elmhurst/Ed Napleton Acura (Elmhurst, Ill.)
  • Napleton’s Arlington Heights Motors, Inc., also doing business as Arlington Heights Chrysler Dodge Jeep Ram (Arlington Heights, Ill.)
  • Hitko Kadric, general manager of the two Illinois-based dealerships
  • Napleton’s North Palm Auto Park, Inc., also doing business as Napleton’s Northlake Chrysler Dodge Jeep Ram (Lake Park, Fla.)
  • Napleton Enterprises, LLC, also doing business as Napleton’s South Orlando/Kissimmee Chrysler Dodge Jeep Ram (Kissimmee, Fla.)
  • Clermont Motors, LLC, also doing business as Napleton’s Clermont Chrysler Dodge Jeep Ram (Clermont, Fla.)
  • North Palm Motors, LLC, also doing business as Napleton’s Northlake Kia (North Palm Beach, Fla.)
  • Napleton’s Ellwood Motors, Inc., also doing business as Napleton’s Ellwood Chrysler Dodge Jeep Ram (Ellwood City, Pa.)
  • Napleton’s Mid Rivers Imports, Inc., also doing business as Napleton’s Mid Rivers Kia (St. Peters, Mo.)

According to the complaint, the dealerships would often wait until the end of the 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. Those junk fees were often added despite consumers specifically declining the add-ons or having confirmed prices that did not include the add-ons. In other cases, the consumers were falsely told the add-ons were free or were a requirement to purchase or finance their vehicle.

A survey cited in the complaint showed that 83 percent of buyers from the dealerships were charged junk fees for add-ons without authorization or as a result of deception. One consumer cited in the complaint reported that the dealership located in Arlington Heights, Ill., charged him for nearly $4,000 in add-on fees after he’d paid a similar amount in down payment.

The complaint also alleges that the Napleton dealerships discriminated against Black consumers in connection with financing vehicle purchases. Napleton employees had wide latitude to increase the cost of a consumer’s loan by increasing the amount paid in interest or adding add-ons to the final contract.

According to the complaint, Black customers at the dealerships were charged approximately $190 more in interest and paid $99 more for similar add-ons than similarly situated non-Latino White customers.

The settlement will also the require the defendants to establish a comprehensive fair lending program that, among other components, will cap the additional interest markup they can charge consumers. The settlement also requires the defendants to charge consumers 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.

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