The Federal Trade Commission announced it is sending payments totaling more than $3.3 million to customers of Passport Auto, an auto dealer group in the Washington D.C. area.
In October 2022, the FTC charged Passport with adding hundreds, or even thousands, of dollars in illegal junk fees to car prices and for discriminating against Black and Latino consumers by charging them higher fees and financing costs. The two sides agreed to a settlement to resolve the case.
Payments are now being sent to 18,000 consumers.
The case against Passport was one example of the tighter scrutiny placed on car dealers and proposed fees by federal agencies, the FTC and Consumer Financial Protection Bureau. Many times investigations are ending in costly litigation.
At the NIADA Accelerate 2023 Convention and Expo, independent dealers will get the latest details during the session “CFPB and FTC Regulatory, Litigation and Enforcement Updates” led by Eric Johnson, a partner at Hudson Cook, LLP. The session is 4:15 p.m. Wednesday, June 21.
“The federal agencies are going after car dealers, with attacks by the CFPB and FTC. But aside from the litigation making big splashes, there’s been a deluge of proposed regulations and rules.”Eric Johnson, a partner at Hudson Cook, LLP.
“The federal agencies are going after car dealers, with attacks by the CFPB and FTC. But aside from the litigation making big splashes, there’s been a deluge of proposed regulations and rules,” said Eric Johnson, a partner at Hudson Cook, LLP.
Much of the litigation has been against groups with multiple stores are operating in multiple states. Many of the suits have surrounded questionable fees charged to customers.
“One of the buzzwords is junk fees and the alleged discrimination against groups,” Johnson said.
Johnson also added the federal agencies are putting increased scrutiny on advertising, while looking for excessive fees.
“It’s hard to protect yourself from the attacks. I want to give the background and help dealers fortify themselves,” Johnson said. “I want to leave dealers with real-world practical advice to keep them in compliance.”
The session will be one of 77 education breakout sessions during the largest convention for the independent dealer.
Representatives from the FTC, CFPB and IRS will also hold sessions, allowing dealers to hear straight from the agencies.
Registration for the NIADA Accelerate 2023 Convention and Expo continues at niada.com/convention/.