Not only are the allegations of racial discrimination and illegal fees leveled against Napleton Automotive Group, one of the largest auto retailers in the U.S., disturbing — especially in an industry that has chronic reputation problems among the general public — the resolution of the case is equally unsatisfying.
Napleton, which "vehemently denied any wrongdoing," settled the case with the Federal Trade Commission for a record $10 million. It had been accused of taking $70 million in illegal fees from customers at eight dealerships in Illinois, Florida, Pennsylvania and Missouri. In addition, the general manager of two stores in Illinois was named.
While the settlement amount is unprecedented, dealerships nickel-and-diming customers — and financially punishing minority buyers — is not. Courts throughout this country have seen an untold number of cases involving unscrupulous and outright illegal dealership fees.
It would seem unwise to cheat customers as federal and state governments clamp down on discriminatory practices.
With dealerships enjoying record sales volume in the years leading up to the COVID-19 outbreak and record profitability since, folding in bogus fees is reckless and a good way to chase away future business — particularly among Black and other minority customers who can shop local competition and can even easily cross state lines thanks to evolving digital retail practices.
The greatest injustice — if the allegations are indeed true — is that Napleton collected an ill-gained $70 million and paid a $10 million penalty for doing so. A cynical eye could view this as "just the cost of doing business." If companies are willing to ride out bad press, one-star reviews and gripe sessions among consumers on Reddit, a comparatively weak penalty seems unlikely to deter them from engaging in such egregious behavior.
The settlement is a start to achieving some degree of justice, but it's indicative of a deeply flawed system. Judges often prefer to avoid time- and resource-consuming trials, and companies are willing to shell out some cash to make a legal problem go away. Nevertheless, we urge prosecutors and regulators to be relentless in punishing wrongdoers to the fullest extent of the law.
The automotive retail industry would be well served to loudly and publicly decry predatory practices among peers and pledge to stomp out the behavior once and for all.