FTC to send $3.5 million to customers affected by Sage Auto Group misconduct

More than 40,000 customers duped by Sage Auto Group, an eight-rooftop group in Southern California, will share a settlement totaling more than $3.5 million.

The Federal Trade Commission will mail 43,456 checks to customers who fell prey to the dealership group's deceptive practices in 2014-16, the FTC said Thursday.

The money comes from a settlement order the FTC filed in March 2017 requiring Sage Auto Group to pay $3.6 million to settle charges for deceptive practices in sales, financing, advertising and online reviews.

Affected customers will receive $81.76 on average, the FTC said in a statement.

The FTC's initial action, filed in the U.S. District Court for the Central District of California in September 2016, involved nine dealerships -- eight new-vehicle stores and one used-vehicle store -- in the Los Angeles area.

Sage Auto Group was accused of using what are commonly called "yo-yo" financing tactics , defined by the FTC as using "deception or unlawful pressure to coerce consumers who have signed contracts and driven off the dealership lots into accepting a different deal," according to its statement at the time. The Sage Auto Group case was the FTC's first yo-yo financing action, the latest statement said.

Sage Auto Group was also accused of charging consumers for F&I products without their consent and making false claims that those products were required or free.

Additionally, the action charged the dealerships and their owners with violating the Truth in Lending Act, Regulation Z, Consumer Leasing Act and Regulation M, for failing to clearly disclose required credit information and lease information in their advertising.

The dealerships charged are Universal City Nissan, Kia of Downtown Los Angeles, Glendale Infiniti-Glendale Nissan, Mercedes-Benz of Valencia, West Covina Toyota, West Covina Nissan, Sage Covina Chevrolet, Sage Hyundai and Sage Pre-Owned. The owners, Joseph Schrage and Michael Schrage, were also charged.

Hannah Lutz contributed to this report.