The Federal Trade Commission (FTC) is cracking down on three Dallas-Fort Worth auto dealerships for allegedly overcharging customers with unnecessary items and hidden fees. The dealerships in question are David McDavid Ford Fort Worth, David McDavid Honda Frisco, and David McDavid Honda Irving, all operated by Fortune 500 automotive group Asbury Automotive. The FTC has filed a complaint against the dealerships, manager Ali Benli, and Asbury, citing violations of the FTC Act and the Equal Credit Opportunity Act.
According to the FTC, Asbury Automotive sneakily included hidden fees and additional items in customer transactions without their consent. Customers were often unaware that they had been charged for add-ons, and when they questioned the charges, they were told that the fees were mandatory. This deceptive practice made it difficult for customers to understand the true cost of their purchases.
Asbury Automotive has responded to the complaint by stating that they plan to challenge it, citing a lack of methodology provided by the FTC for their decision. The company also claimed that they have not received any consumer complaints against the McDavid dealerships since 2019. Asbury CEO David Hult emphasized the company’s commitment to compliance and customer service, stating that they offer products that protect customers and their families.
The FTC’s investigation revealed that approximately 75% of Asbury’s customers had been overcharged for products and services they did not want or were misled into believing were necessary. Add-ons included protective coatings and service contracts for insurance policies. The FTC also found evidence of overcharging against Black and Latino customers, with Black customers being charged $298 more on average than white customers for the same add-ons.
Despite facing legal challenges from the FTC, Asbury Automotive has reported record revenue in the first quarter of 2023. Hult believes that the FTC is targeting Asbury to extract fines from the company, but he remains confident that they will prevail in the litigation. The FTC has not yet set a date for a court hearing in this case.
In conclusion, the FTC’s actions against these auto dealerships highlight the importance of transparency and fairness in consumer transactions. Customers deserve to know the true cost of their purchases and should not be misled or overcharged for unnecessary items. Asbury Automotive’s response to the complaint underscores the ongoing debate over consumer protection and regulatory oversight in the automotive industry.