U.S. FTC Sues Asbury Automotive Group Over Alleged Discriminatory Practices: What You Need to Know to Protect Your Finances
By Jody Godoy
WASHINGTON (Multibagger) - The U.S. Federal Trade Commission (FTC) has filed a lawsuit against Asbury Automotive Group (NYSE:ABG), accusing three of its Texas dealerships of discriminatory pricing practices against Black and Latino customers. The suit alleges that these dealerships systematically charged minority customers higher prices and added unauthorized services to their contracts.
Key Allegations Against Asbury Automotive Group
- Discriminatory Pricing: The FTC claims that David McDavid Ford (NYSE:F) in Fort Worth and Honda (NYSE:HMC) dealerships in Irving and Frisco charged Black and Latino customers more than their white counterparts. On average, Black customers paid $298 more, while Latino customers paid $214 more for identical add-ons compared to non-Latino white customers.
- Unauthorized Services: Up to 75% of customers at these dealerships reported being charged for services like protective coatings, service contracts, and insurance without their consent. In some cases, customers had explicitly declined these services, or were misled into believing they were mandatory.
- Systemic Issues: The FTC's action against Asbury follows a similar case settled against an Arizona dealership, indicating a broader pattern of discriminatory practices in the auto sales industry.
Company Response
Asbury Automotive Group operates over 155 dealerships across more than a dozen states. While the company has not officially commented on the lawsuit, Andrew Ferguson, one of the two Republican FTC commissioners, stated that Asbury intends to fight the allegations. Ferguson criticized the FTC's decision to label discriminatory practices as unfair business practices, arguing it sets a concerning precedent.
Implications for Consumers
FTC Chair Lina Khan and Democratic commissioners emphasized that exempting discriminatory behavior from unfair practices would essentially allow companies to continue such practices without consequence. The unanimous vote by all five commissioners to authorize the lawsuits underscores the agency's commitment to tackling discriminatory practices in the marketplace.
Breakdown: How This Affects You
For those unfamiliar with financial and legal jargon, here's a simple breakdown:
- What Happened? The FTC is suing Asbury Automotive Group, claiming that some of their dealerships in Texas charged Black and Latino customers more than white customers for the same services and added extra services to contracts without customer consent.
- Why Does It Matter? If true, this means that minority customers are being unfairly treated and financially exploited. This kind of discrimination can lead to higher costs and financial stress for those affected.
- What Should You Do? If you're buying a car, always review your contract carefully. Ensure you understand and agree to every charge. If you suspect you've been unfairly charged, report it to the FTC or seek legal advice.
In conclusion, the FTC's lawsuit against Asbury Automotive Group highlights the importance of vigilance and fairness in consumer transactions. Discriminatory practices not only harm individual consumers but also undermine trust in the marketplace. Stay informed and protect your financial interests by being aware of your rights and responsibilities as a consumer.