Napleton Automotive to pay $10 million to settle fraud, racial discrimination charges

Napleton Automotive to pay $10 million to settle fraud, racial discrimination charges


The Edward Napleton Automotive Group of Oakbrook Terrace will pay $10 million to settle allegations some of its dealerships discriminated against Black customers and charged at least $70 million in illegal fees.

The deal was announced Friday by the Federal Trade Commission and the Illinois attorney general’s office. The complaint and the settlement agreement were filed Thursday in federal court in Chicago.

“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,” said Samuel Levine, director of the FTC’s Consumer Protection Bureau, in a news release. “Especially as families struggle with rising car prices, dealerships that cheat their customers can expect to hear from us.”

Napleton denies any wrongdoing and settled to avoid the disruption of an ongoing dispute, said Tilden Katz, spokesman for Napleton. “Most of its (the complaint’s) claims were based on interpretations of statistical data and there was no actual finding of intentional wrongdoing,” Katz said in a written statement.

The dealerships — including Napleton’s Kia of Elmhurst/Ed Napleton Acura in Elmhurst, and Napleton’s Arlington Heights Chrysler Dodge Jeep Ram — charged “numerous” customers since 2017 for unwanted and unauthorized add-ons, according to the complaint.

Employees could increase the cost of customers’ loans by increasing the amount paid in interest or inserting add-ons in the final contract, the complaint states.



Black customers were charged approximately $190 more in interest and paid $99 more for similar add-ons than non-Hispanic white customers, the complaint says. The difference could not be explained by factors related to underwriting risk or the credit characteristics of the loan applicants.

According to the complaint, eight of Napleton’s 51 dealerships illegally added fees for unwanted products — including payment insurance, maintenance plans and paint protection — without the buyers’ authorization or by deceiving them.

The complaint says the Arlington Heights dealership charged one customer $4,000 in add-ons — the exact amount he had put as a down payment.

The complaint states employees would wait until the end of an hourslong sales negotiation to sneak the fees into the contracts, which often were as long as 60 pages. In some cases, customers had declined the add-ons. In other cases, the employees falsely said the add-ons were free.

In yet other cases, the dealerships advertised cars for a certain price. But when buyers came to the dealerships, they were told they couldn’t buy or finance the cars without the add-ons.



When a Napleton corporate employee wrote to the Illinois dealerships’ manager telling him there was an increase in complaints about the unwanted add-ons, he responded, “Tough times,” according to the complaint.

Almost the entire settlement will be distributed to the customers. The FTC will contact the buyers.

The settlement requires Napleton to revise its lending practices. It also must have employees trained at least once a year about nondiscrimination in lending.



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