Auto Dealer Pays $10 Million in Record-Setting Settlement with the FTC and Illinois

  • The FTC and Illinois AG Kwame Raoul reached a settlement with multistate auto dealership Edward Napleton Automotive Group and affiliate persons and dealerships (collectively, “Napleton”) to resolve allegations that Napleton systematically and repeatedly misled consumers, discriminated against Black customers, and used illegal sales and marketing tactics in violation of the FTC Act, the Truth in Lending Act and its implementing regulations, and the Equal Credit Opportunity Act, as well as the Illinois Consumer Fraud and Deceptive Business Practices Act (CFDBPA) and the Illinois Motor Vehicle Advertising Regulations.
  • According to the Complaint, Napleton dealerships allegedly discriminated against Black customers financing vehicle purchases by charging approximately $190 on average more in interest for Black applicants compared to similarly situated non-Latino White applicants. In addition, the Complaint alleges that Napleton violated the Illinois CFDBPA by engaging in unlawful advertising practices and, among other things, charging consumers without their informed consent for “add-on” products and services such as service contracts, GAP insurance, and paint protection, sometimes by falsely telling consumers that such products are mandatory or by ignoring a consumer’s express request not to include them.
  • Under the terms of the settlement, Napleton must pay $10 million in civil penalties, which, according to the FTC, is a record-setting monetary judgment for an FTC auto lending case. In addition, Napleton is, among other things, permanently enjoined from making financing claims without clear and conspicuous disclosures, engaging in unlawful credit discrimination, or making further misrepresentations to consumers. Napleton must also implement a fair lending program which will include employee training, guidelines, and compliance reporting.