The Federal Trade Commission (FTC) and Connecticut Attorney General William Tong filed suit against auto dealer Manchester City Nissan (Manchester City), its owner, and several employees for allegedly deceiving consumers about the price of certified used cars, add-ons, and government fees. Filed January 4, the lawsuit was brought under the FTC Act and the Connecticut Unfair Trade Practices Act.
The complaint alleged, among other things, that Manchester City:
- Advertises that it will sell customers certified pre-owned vehicles for a specific price, but when customers attempt to purchase the vehicles Manchester City charges them hundreds to thousands of dollars in additional fees for services that are part of certifying a vehicle.
- For example, Manchester City advertised a “certified” 2017 Nissan Rogue for $15,700, but charged the buyer a $5,295.65 inspection fee on top of that price for a vehicle that was advertised as already inspected as part of the certification
- Often charges consumers twice for “certifying” a vehicle that they do not actually certify, leaving those consumers without the additional warranty that was promised.
- Includes add-on charges, such as guaranteed asset protection (GAP) insurance, service contracts, maintenance contracts, and total loss protection (TLP), in the closing documents without obtaining the consumers’ consent. Specifically, TLP appears in 90% of all sales by Manchester City.
- For example, one consumer agreed to purchase a 2017 Nissan Rogue Sport that was advertised for $20,500. After she left the dealership, she realized she had been charged $3,300 for a Nissan service contract, $3,500 for a preventative maintenance agreement, and $516 for TLP.
- Another consumer complained that she was charged over $9,000 for four warranties and $516 for TLP that she specifically declined.
- Falsely tells consumers that the dealership or the finance company requires add-on products like GAP insurance to purchase, lease, or finance the vehicle.
- Tacks on additional amounts in fees in the contract without the consumers’ consent.
- For example, Manchester City told one consumer that Connecticut registration and other state fees were $345, when, in fact, Connecticut registration and other fees were only $208.20.
In announcing the lawsuit, the FTC’s Bureau of Consumer Protection Director Samuel Levine stated, “this action follows on the heels of the [FTC’s] announcement of the Combating Auto Retail Scams (CARS) Rule, and once again makes clear that bait-and-switch tactics and hidden junk fees have no role in honest dealmaking.” As discussed here, the CARS rule published last month is aimed at clear disclosures for any add-on products and requires consumer consent for fees in the car-buying process.