On April 1, 2022, the Federal Trade Commission (FTC) announced that it reached a settlement with a group of Illinois-based auto dealers to resolve allegations that they had violated Sections 13(b) and 19 of the Federal Trade Commission Act (FTCA), 15 U.S.C. § 53(b), 57b, the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601-1666j, and its implementing Regulation Z, 12 C.F.R. Part 226, and the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691-1691f, and Illinois state law.
The FTC alleged that the auto dealers charged customers with illegal junk fees for unwanted add-ons. Further, the Commission alleged that the auto dealers unlawfully discriminated against Black consumers by charging more for financing vehicle purchases. More specifically, the dealers allegedly increased the amount paid in interest and tacked on more add-ons to the final contract for Black consumers’ loans.
If entered by the United States District Court for the Northern District of Illinois, the consent order will require the dealers to collectively pay nearly $10 million, most of which will provide monetary relief to affected consumers. The consent order also requires the auto dealers to establish a fair lending program and permanently enjoins the auto dealers from engaging in certain deceptive and discriminatory practices.