FTC complaint alleged in part that the eight Napleton dealerships charged black buyers more in interest and add-on fees.  -  IMAGE: Getty Images/dragana991

FTC complaint alleged in part that the eight Napleton dealerships charged black buyers more in interest and add-on fees.

IMAGE: Getty Images/dragana991

The Federal Trade Commission will refund consumers $9.8 million from a settlement with Napleton automotive group over junk fees and discrimination against black customers through higher financing charges.

The refunds will be distributed among more than 66,000 checks that average $147 apiece.

The complaint was filed in March against Napleton Automotive Group, alleged that eight of its dealerships and the general manager of two Illinois dealerships added junk fees for unwanted products, including paint protection, costing buyers up to thousands of dollars. The FTC said the dealerships would often add the fees late in contract talks to add the fees to the buyers’ contracts.

The FTC also alleged that the dealerships had “wide latitude” to jack up the cost of black borrowers’ loans via interest or add-ons, typically $190 more in interest costs and $99 more in add-ons than similarly situated non-Hispanic white buyers.

The settlement also requires the defendants to establish a fair lending program capping the additional interest markup charged to customers and to charge buyers only with express informed consent.

READ MORE: FTC Rules Top Concerns in NADA Update

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