Dealership & ex-GM told to pay $2.6m after drivers hit with ‘deceptive’ fees & tricked into signing ‘predatory’ add-ons
A DEALERSHIP and its former GM have agreed to a $2.6 million settlement after the FTC launched a complaint about its sales practices.
The Arizona-based dealerships sold several GM brands - but the FTC and the state claimed sales associates overcharged some customers.
In comments to The U.S. Sun, the dealership denied the claims and said they settled to avoid years of costly court and legal fees.
"There is no way this dealership could attract and retain customers if the claims laid out by the FTC were endemic to Coulter Tempe but that doesn’t mean we can't improve," the company said in a statement.
"This is a family-owned business with a 100-year legacy in Arizona, and its good name is its most valuable asset. Unfair pricing or racial bias for short-term gain is not only wrong, but it's bad for business."
The FTC and Arizona's State Attorney General, Kris Mayes, alleged the dealership routinely charged customers for unwanted add-ons and other questionable fees.
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In an FTC survey of Coulter dealership customers, 92% of respondents said they were billed for at least one unauthorized car add-on or something they thought was mandatory.
Coulter dealerships denied the claim, saying they weren't allowed to see the survey's findings.
The complaint also accuses Coulter of advertising car prices online at steep discounts, tricking customers into believing they could snag the advertised deals.
But when those customers showed up at the dealership, the FTC alleged shoppers were told the advertised price wasn’t available.
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Instead, the dealership allegedly slapped on “market adjustments” that inflated the price by hundreds or even thousands of dollars, covering pre-installed add-ons and other random fees.
These add-ons, such as VIN etching, window tinting, nitrogen-filled tires, and theft recovery services, were often presented as required purchases, the complaint said.
The complaint further accuses Coulter of discriminating against Latino customers.
Mayes said the dealership charged an average of $1,200 more in interest and add-on fees than their white, non-Latino counterparts.
"Do not discriminate against your customers, do not deceive your customers, don't engage in this kind of behavior," Mayes warned in comments to local CBS affiliate KPHO-TV.
"If you do, we will come after you too."
Coulter is one of the oldest dealerships in Arizona, selling top-end GMC, Cadillac, and Buick vehicles.
Dealership Tips
Here are some expert tips when purchasing a car from a dealership lot:
- 1. Set your price: Ensure you've calculated your monthly budget before going to the lot. You should include the car's loan payment, insurance costs, fuel, and regular maintenance.
- 2. Research: Make sure you know which cars you're interested in test driving before you reach the dealership.
- 3. Pre-approval: Secure financing before you go to the dealership. Dealerships may give you a better interest rate if they are competing with an outside bank.
- 4. Test away: Get behind the wheel before making any payments. A car purchase will be worth thousands of dollars - drivers should ensure they like the drivetrain, steering feel, and comfort of the car before taking it off the lot
- 5. Haggle: Drivers should always try to negotiate the price. There are so many good cars on the American market - buyers have a strong hand when negotiating price.
Source: Kelley Blue Book
The dealership said it 37% of its staff identify as Hispanic.
The company also pointed to its A-plus rating from the Better Business Bureau.
"The dealership is able to maintain its large repeat customer base because it provides quality service at a fair price," the dealer added in comments to The U.S. Sun.
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"The dealership respects the mission of the FTC to protect consumers.
"Hopefully, this settlement furthers that mission while enabling us to improve our already stellar record of customer satisfaction."