The Federal Trade Commission (FTC) has accused three North Texas David McDavid car dealerships and their parent company, Asbury Automotive, of engaging in deceptive practices that targeted Black and Latino consumers. The commission’s administrative complaint alleges that customers were unknowingly charged hidden fees for unwanted add-on items, particularly at the Ford location in Fort Worth, the Honda locations in Frisco and Irving.
One of the deceptive practices highlighted by the FTC is „payment packing,“ where customers were led to agree to higher monthly car payments than necessary. To make up the difference, additional items were added to the sales contract without the customers‘ knowledge or consent. This unethical behavior disproportionately affected Black and Latino consumers, with Black customers being charged an average of $298 more than white customers for the same add-ons, and Latino consumers being charged $214 more on average.
According to complaints from consumers, the add-on items included protective chemical coatings, service contracts, and insurance policies. Many customers reported that these products were never discussed during the sales process, while others explicitly declined them only to have them added later without consent. Customers were not shown full documents and were only directed to sign in specific places, while some were falsely told that the add-ons were mandatory.
The FTC’s director of the Bureau of Consumer Protection, Samuel Levine, emphasized the commission’s commitment to cracking down on illegal hidden fees and discrimination in the auto industry. He stated that such practices have no place at car dealerships and that the FTC will continue to protect consumers and ensure fair treatment.
In response to the allegations, Asbury Automotive issued a statement denying the accusations of misleading business practices and racial discrimination. The company claimed that customers were provided with full disclosure about the cost of the add-on products and their impact on car payments. Asbury also stated that the dealerships have measures in place to ensure that protection products are only sold with the customer’s explicit consent.
Despite Asbury’s rebuttal, the FTC proceeded with issuing the administrative complaint, signaling its belief that the law was being violated and that a public interest proceeding was necessary. The next step in the process involves a hearing before an administrative law judge to address the allegations.
Asbury Automotive expressed its intention to challenge the FTC’s lawsuit, stating that it will not allow the commission to impose fines or requirements that negatively impact the car-buying experience for customers. The company’s CEO, David Hult, emphasized that they will defend themselves against the allegations and maintain their commitment to providing a fair and transparent car-buying experience.
The FTC did not provide a date for the hearing, and Asbury Automotive criticized the commission for not sharing the methods used to arrive at the allegations. The ongoing dispute between the FTC and Asbury Automotive underscores the importance of consumer protection and fair business practices in the auto industry.