Tempe car dealership settles lawsuit for $2 million
TEMPE, Ariz. — An Arizona car dealership is set to settle allegations that it engaged in deceptive sales practices that led customers to overpay for cars.
The Arizona Attorney General (AG) hopes the action sends a message, while Coulter Buick GMC Tempe owners are defending their business.
The FTC and the Attorney General’s office called the sales tactics a “bait-and-switch” scheme, alleging that the dealer advertised lower online prices for the cars but added more than $4,000 in surcharges and interest, and that the dealer discriminated against Latinos.
The dealer settled the case for more than $2 million but maintains that none of the allegations are true.
“Price misrepresentation is unfair and unacceptable for any car dealership,” said Arizona Attorney General Chris Mays.
She believes this has been going on for at least five years.
“They end up driving away having paid over $4,000 in additional fees and interest that they never expected and in some cases had no idea about,” she said.
The additional options included items such as VIN engraving, window tinting and nitrogen-filled tires, according to the lawsuit.
“A survey of consumers who purchased or leased vehicles from Coulter found that 92 percent of consumers surveyed were charged for at least one additional option without their authorization or without thinking they needed it,” a news release from the attorney general’s office said.
Mays also said Latino customers pay about $1,200 more in surcharges and interest than white customers.
Director of Operations Lindsay Coulter claims the complaints are not accurate.
“Forty percent of the employees at this store are Latino. It is extremely hurtful to us as a company that something like this has become public,” she said. “We dispute all allegations.”
Dealers say the findings are based on “unreliable statistics” that don’t match the business figures they track.
“There’s no additional charge up to $4,000. With the information they have, I don’t know exactly where they’re getting that information from,” she said.
“It is noteworthy that two of the five FTC Commissioners voted against the discrimination lawsuit,” a news release from the dealership read in part.
Nonetheless, the company agreed to the settlement.
“Financially we just felt it was more responsible for us to settle and move on,” Coulter said.
Brian Newman, owner of Newman Auto Network, who is not connected to the lawsuit, suggested that with so many dealerships being sued for these types of allegations, industry-wide reform is needed to restore customer trust.
“I’m not surprised at all. It’s happening at most dealerships across the state, and across the country,” he said of the allegations.
The Arizona Attorney General’s Office says anyone who believes they have been affected can contact the office to receive refunds.
The dealership has an A+ rating with the Better Business Bureau and highlights its nearly 30-year history in Tempe.
“The majority of customers who purchase a new vehicle at our Coulter Tempe dealership have their vehicle serviced there. In fact, repeat customers are central to Coulter’s business model,” the dealership said in a news release.
