The Illinois Attorney General and the FTC announced a settlement that requires North American Automotive Services Inc., also known as Edward Napleton Automotive Group (Napleton), to pay $10 million to resolve allegations dealerships charged illegal fees. The settlement was filed with a complaint alleging Napleton dealerships illegally charged consumers for unwanted “add-ons,” discriminated against Black customers by charging more for financing, and violated Illinois motor vehicle advertising regulations by including coupons and offers of free gifts in its advertisements.

According to the lawsuit, Black customers were charged about $190 more in interest and paid $99 more for similar add-ons than similarly situated white customers. The attorney general and FTC alleged eight Napleton dealerships and the general manager of two Illinois dealerships illegally tacked on fees such as payment insurance and paint protection. The illegal fees cost consumers hundreds or even thousands of dollars, the agencies said. One consumer reported a dealership charged him nearly $4,000 in add-fees after he had paid a similar amount in a down payment, according to the lawsuit.

The lawsuit said the dealerships would wait until the end of the hours-long negotiation to sneak fees for add-on products and services into customers’ contracts. The fees, the agencies said, were often added in spite of customers declining the add-ons or having confirmed prices that did not include the add-ons. In other cases, the lawsuit said, customers were falsely told the add-ons were free or were a requirement to buy or finance their car.

“I appreciate the partnership of the FTC in holding accountable Edward Napleton Automotive Group over its abusive, discriminatory practices in Illinois and several other states around the nation,” the Illinois AG said. “A vehicle is a large purchase, and the process can be overwhelming for consumers. We will not tolerate dealerships that take advantage of customers by charging them for added on products and features they never agreed to – or explicitly declined.”

Under the terms of the proposed settlement, $9.95 million of the $10 million judgment will be used to provide monetary relief to consumers, and $50,000 will be paid to the Illinois Attorney General Court Ordered and Voluntary Compliance Payment Projects Fund. Consumers who are eligible for relief will be contacted by the FTC.

The settlement will also the require the defendants to establish a comprehensive fair lending program that, among things, will cap the additional interest markup customers can be charged. The settlement also requires the defendants to charge customers add-on fees only after receiving express, informed consent. Dealerships are also prohibited from misrepresenting the cost or terms to buy, lease or finance a car, or whether a fee or charge is optional.