The three-year saga of the Federal Trade Commission's case against Tate's Auto Group concluded last month with a $450,000 settlement with former dealer principal Richard Berry.
The group, with stores in Arizona and New Mexico, was accused in 2018 of deceiving predominantly Native American car buyers and falsifying information on their vehicle financing applications — becoming the first dealership group pursued by the agency for income falsification.
Tate's Auto denied the claims and planned to fight the allegations in federal court, but the legal battle drained its finances, and it filed for Chapter 7 bankruptcy. The FTC originally pursued a $7 million settlement, which failed to materialize after the bankruptcy proceedings last year.
The July 26 FTC agreement with Berry and group President Linda Tate is substantially smaller but will be used for consumer redress or returned to the U.S. Treasury.
In a statement emailed to Automotive News, Berry asserted his innocence and accused agency staff of being motivated by political agendas.
"Fortunately, we had an outstanding insurance partner which not only defended us but encouraged early in the process to not allow for the 7-figure 'settlement' the FTC sought in lieu of filing the complaint," Berry wrote. "Even though we had prevailed on every meaningful charge the FTC alleged, our carrier agreed to make a payment of gesture just to end the madness."
FTC Commissioner Rebecca Kelly Slaughter said in a statement the charges against the dealership group were "eerily similar" to consumer mistreatment that occurred during the financial crisis.
"This is exactly the type of pernicious conduct targeting a community that has already suffered generations of economic injustice that the FTC should be pursuing," Slaughter said.