Car Dealership Agrees to Consent Order to Pay $5.1 Million in Debt Forgiveness

State AGs

On June 2, 2017, the Florida Attorney General (“Florida AG”) announced that it entered​ into a consent order with a Florida car dealership and its president following allegations that the dealership and the individual violated the Federal Trade Commission Act (“FTC Act”) and its regulations, specifically 16 C.F.R. § 255.5, and the Florida Consumer Collection Practices Act, §§ 501.204, 501.976, and 559.72.

The Florida AG alleged that the car dealership, without consumers’ knowledge or consent, affixed GPS tracking devices to the consumers’ cars. The complaint also alleged that the dealership would increase consumers’ monthly payments by adding optional items to the payment without alerting the consumer.  The dealership allegedly would attempt to collect consumers’ debts, sometimes debts that did not exist, by repossessing the consumers’ cars, which the dealership tracked using the GPS devices.  The Florida AG also alleged that dealership violated 16 C.F.R. § 255.5 by creating fake consumer profiles online and posting fake positive reviews.

The car dealership and its president did not admit any of the allegations in the complaint.  However, the dealership agreed to pay $5.1 million in debt forgiveness to consumers, to modify its debt collection procedures, to pay $2,500 in consumer redress, and to pay $280,000 in attorneys’ fees and costs.

 

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