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NYC car dealer accused of discriminatory lending

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The law is clear: it’s illegal for someone who lends money to charge people higher interest rates and fees based on their race. According to an FTC case announced today, a car dealer in the Bronx did it anyway.

The FTC alleges that Bronx Honda told their employees to charge African-American and Latino people higher interest rates and fees when they applied for dealer financing. Employees were told they could do this because the African-American and Latino customers had limited education. And the employees had every reason to go along with it: they got a share of the higher charges. 

That’s not all, though. To get folks in the door, the FTC alleges the dealership targeted African-American and Latino communities with misleading ads. They advertised sale prices on their cars — and then claimed the sales listing was a mistake, and if someone still wanted that car, they’d need to pay extra fees or a higher, non-sale price. People who were shopping for a Certified Pre-Owned Honda were also told that “certification” and other fees (which often added up to $3000) were required. Despite the fact that the cars were Certified Pre-Owned before they arrived on the sales floor. 

After all these fees were tacked on and the person agreed to a price, it was put into a contract. Another problem? That number was often higher when it got written on paper. The FTC alleges the dealership often added additional “fees,” in the form of a higher total sales price or monthly installments, without telling the buyer. 

How can you avoid paying too much for your next car?

  • Shop around and compare offers from several dealers. Watch this video for more tips on deceptive car ads.
  • Look into financing options from banks or credit unions in addition to dealerships.
  • Make sure all promises and terms are in writing before you sign on any dotted lines.

Spot a car dealership like this? We want to hear about it: ftc.gov/complaint

Tagged with: car, car financing, shopping
Blog Topics: 
Money & Credit

Comments

*Any punishments in store for these lenders? AND compensation for their victims?

The press release explains that New York City car dealer Bronx Honda and its general manager, Carlo Fittanto, will pay $1.5 million to settle Federal Trade Commission charges they discriminated against African-American and Hispanic car buyers and engaged in numerous other illegal business practices. In addition to the $1.5 million payment that will be used to provide redress to consumers, the settlements also prohibit Bronx Honda and Fittanto from misrepresenting the cost or terms to buy, lease, or finance a car, or whether a fee or charge is optional. They will also be required to establish a fair lending program that will, among other components, cap the amount of additional interest markup they can charge consumers.

I'm glad the dealership got caught, and wish that they have to pay a hefty fine for their scampish dealings!! Also FTC, thanks for the education.

That is discrimination! The dealership should face fines and shutdown.

Well, did those people who were committing this fraud get fined, sent to jail after a trial? What happened?

I am happy that you caught up with that dealer i expect that honda will pull out and hopefully somebody goes to jail and has to sign one of their own contracts

I hope the participants ALL go to jail. AND huge fine. I would include the employees in the fine. They are culpable also. Publish the dealerships name would be appropriate.

the rule of Law must make a gigantic impact on this nation.

It appears as if the name of the dealership is Bronx Honda.

I like to know if this a common practice w, Honda Motors. We bought a NEW CRV 2015 EX Im Asian American Paying Over $527 M.O. who do I contact...This is a Lot more than a Hi End2020 Model

I can't believe that this can still happen in this day and age. I'm please to hear that this establishment was caught and had to pay a hefty fine. YES!!!!

They should shut down this place,and put them in jail for 5 years.

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