In a significant move to combat predatory and unfair business practices, Attorney General Kris Mayes alongside the Federal Trade Commission (FTC) have taken legal action against the Coulter Motor Company, based in Arizona, for allegedly engaging in deceptive pricing strategies and discriminatory practices that targeted Latino customers. The resolution of the lawsuit includes a $2.6 million settlement, primarily aimed to refund customers who have been harmed by the motor company's conduct, as per an announcement by the Attorney General's office.
According to the Attorney General's office, Coulter Motor Company reportedly enticed consumers with online vehicle prices significantly reduced from their suggested retail values, but these prospects turned to grievances when it became apparent that the advertised prices were not honored at the dealership. As detailed in the joint FTC and State of Arizona complaint, customers were often charged with additional hundreds or thousands of dollars through "market adjustments" and pre-installed add-ons. Attorney General Mayes condemned these practices, stating, "Coulter's deceptive and discriminatory practices are unacceptable," and affirmed his commitment "to stop these unfair practices and protect Arizona consumers." Samuel Levine, the FTC's Bureau of Consumer Protection Director, echoed these sentiments, promising continued efforts to "crack down on practices that drive up prices, cheat consumers, and undercut honest sellers."
The suit against Coulter, which operates Coulter Cadillac Tempe and Tempe Buick GMC, along with its former general manager, Gregory Depaola, unearthed more disturbing details. The company was found to habitually charge customers for unwanted add-ons without their consent. A consumer survey highlighted that a staggering 92 percent of Coulter's customers were billed for at least one unsanctioned add-on. These add-ons were not only redundant but in some cases were doubly charged, both as standalone items and again within arbitrary "package" deals.
This lawsuit has not only exposed the deceptive pricing but also brought to light discriminatory practices within the company. The case alleges that Latino consumers were systematically overcharged, compelled to pay nearly $1,200 more on average in interest and add-on expenses compared to non-Latino White consumers. These malpractices have resulted in charges against Coulter and Depaola for violations of the FTC Act, the Equal Credit Opportunity Act, and the Arizona Consumer Fraud Act. To provide remedy and ensure future compliance, Coulter is ordered to establish a comprehensive fair lending program as part of the proposed settlement, which requires trainings and has an appointment of a fair lending officer in the framework, as detailed by the Attorney General's office.
The FTC's commitment to consumer protection was unanimously demonstrated with a 5-0 vote authorizing the filing of the complaint and the stipulated final order, which has been lodged in the U.S. District Court for the District of Arizona. Consumers who feel they may have been victims of such fraudulent practices can seek assistance and file complaints with the Attorney General’s office or the FTC by using the contact information provided on their respective websites.
