Consumer Alert
NYC car dealer accused of discriminatory lending
The law is clear: it’s illegal for someone who lends money to charge people higher interest rates and fees based on their race. According to an FTC case announced today, a car dealer in the Bronx did it anyway.
The FTC alleges that Bronx Honda told their employees to charge African-American and Latino people higher interest rates and fees when they applied for dealer financing. Employees were told they could do this because the African-American and Latino customers had limited education. And the employees had every reason to go along with it: they got a share of the higher charges.
That’s not all, though. To get folks in the door, the FTC alleges the dealership targeted African-American and Latino communities with misleading ads. They advertised sale prices on their cars — and then claimed the sales listing was a mistake, and if someone still wanted that car, they’d need to pay extra fees or a higher, non-sale price. People who were shopping for a Certified Pre-Owned Honda were also told that “certification” and other fees (which often added up to $3000) were required. Despite the fact that the cars were Certified Pre-Owned before they arrived on the sales floor.
After all these fees were tacked on and the person agreed to a price, it was put into a contract. Another problem? That number was often higher when it got written on paper. The FTC alleges the dealership often added additional “fees,” in the form of a higher total sales price or monthly installments, without telling the buyer.
How can you avoid paying too much for your next car?
- Shop around and compare offers from several dealers. Watch this video for more tips on deceptive car ads.
- Look into financing options from banks or credit unions in addition to dealerships.
- Make sure all promises and terms are in writing before you sign on any dotted lines.
Spot a car dealership like this? We want to hear about it: ftc.gov/complaint.
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In reply to *Any punishments in store for by Jag - Z
The press release explains that New York City car dealer Bronx Honda and its general manager, Carlo Fittanto, will pay $1.5 million to settle Federal Trade Commission charges they discriminated against African-American and Hispanic car buyers and engaged in numerous other illegal business practices. In addition to the $1.5 million payment that will be used to provide redress to consumers, the settlements also prohibit Bronx Honda and Fittanto from misrepresenting the cost or terms to buy, lease, or finance a car, or whether a fee or charge is optional. They will also be required to establish a fair lending program that will, among other components, cap the amount of additional interest markup they can charge consumers.
In reply to I hope the participants ALL by Old Person
In reply to I hope the participants ALL by Old Person