The Federal Trade Commission (FTC) and Arizona Attorney General have taken action against Coulter Motor Company and its former General Manager Gregory Depaola, alleging a series of deceptive and discriminatory practices at their Tempe-based car dealerships. A recent complaint filed by the FTC outlines a concoction of tactics including misleading advertising, price inflations, unwarranted add-ons, and prejudiced treatment of Latino consumers. A proposed settlement seeks to resolve these allegations, demanding a halt to illegal conduct and an improvement in business practices, with financial repercussions including a $2.6 million judgment, according to the Federal Trade Commission.
Beginning with the "bait," Coulter Motor Company caught consumers' attention with attractive sale prices only to "switch" them to higher prices later on. For example, a vehicle advertised for the “Coulter Price” of $25,675 was often sold or leased for hundreds or even thousands of dollars more than expected. The FTC and the Arizona AG assert the additional charges were not disclosed, often hidden at the bottom of the webpage or within inconspicuous hyperlinks, a practice that quickly spirals into a significant financial burden for unwary consumers.
The "hitch" referred to in the allegations indicates that some price hikes were justified on baseless grounds such as a "market adjustment," leveraging a supposed “market shortage," as per the Federal Trade Commission. The complaint also accuses the company of piling on unrequested and pricey add-ons like theft protection, paint coating, and VIN etching, often embedded within extensive paperwork. If consumers detected these add-ons and challenged them, they were occasionally misled to believe these services were obligatory, or in some cases, double-billed for the same item.
Regarding the discriminatory "which?" practice, it is claimed that Coulter Motor Company systematically overcharged Latino customers. According to the complaint, on average, these customers paid nearly $1,200 more than their non-Latino White counterparts in interest and additional fees. The FTC and Arizona AG suggest that the dealership had a financial incentive for marking up interest rates, especially since their sales staff benefited directly from such markups. Such discretion reportedly led to "statistically significant disparities" in charges that the authorities have deemed unacceptable.
