Napleton Auto agrees to $10 million settlement with FTC, Illinois AG for allegedly charging Black clients more
Ed Napleton Automotive, an Oakbrook Terrace-based dealership group, agreed to a record $10 million settlement with the Federal Trade Commission and Illinois attorney general’s office for allegedly adding on illegal fees and charging Black customers more for financing during purchases.
The settlement agreement, announced Friday, was filed jointly with a complaint in Chicago federal court, alleging the multistate dealership group charged thousands of customers “hundreds or thousands of dollars” for add-on products such as “paint protection” without informed consent.
The complaint also alleges that Napleton discriminated against Black customers, charging them on average $99 more for add-on packages and $190 more in financing interest charges than white customers.
“Working closely with the Illinois Attorney General, we are holding these dealerships accountable for discriminating against minority consumers and sneaking junk fees onto people’s bills,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a news release. “Especially as families struggle with rising car prices, dealerships that cheat their customers can expect to hear from us.”
In a statement issued Friday, a spokesman for the Napleton group “vehemently” denied any wrongdoing.
“The Ed Napleton Dealership Group has resolved disputed claims made by the Federal Trade Commission and the Illinois Attorney General’s office,” said Napleton spokesman Tilden Katz. “We made this decision to avoid the disruption of an ongoing dispute with the government. As a result, we reluctantly determined that it was in our best long-term business interests to resolve these matters.”
Founded in 1931, family-owned Napleton has grown into one of the largest Illinois-based auto groups, with 51 dealerships in eight states: Illinois, Indiana, Wisconsin, Missouri, Minnesota, Florida, Georgia and Pennsylvania. The complaint names eight dealerships as defendants, including Ed Napleton Elmhurst Imports and Napleton’s Arlington Heights Motors.
One consumer cited in the complaint alleged the Arlington Heights dealership tacked on $4,000 in add-on fees without consent.
In addition to violations of federal consumer fraud, truth in lending and equal credit opportunity acts, the complaint also alleges Napleton’s Arlington Heights dealership and its general manager, Hitko Kadric, ran afoul of Illinois auto advertising regulations with an April 2021 direct mail campaign offering a $3,000 gift card toward the purchase of a new car.
Under Illinois law, dealers are prohibited from offering a free gift in connection with the purchase or lease of a vehicle where the final price is reached through negotiation.
Katz said the settlement is the result of a three-year investigation and that there was “no actual finding of intentional wrongdoing.” Napleton has taken steps to implement “additional safeguards to ensure full transparency to our customers,” he said.
A record-setting monetary judgment for an FTC auto lending case, $9.95 million of the $10 million settlement will be used to provide relief to consumers, with $50,000 paid to a special fund of the Illinois attorney general’s office for law enforcement and public education. Consumers who are eligible for relief will be contacted by the FTC.
The settlement requires Napleton to establish a fair lending program that caps the additional interest markup. It also requires the dealerships to charge consumers only with express, informed consent, and prohibits them from misrepresenting the cost or terms to buy, lease or finance a car.
