TEMPE, AZ – Coulter Motor Company – along with its former General Manager, Gregory Depaola – have been slapped with a lawsuit by the Federal Trade Commission (FTC) and the Arizona Attorney General which alleges that the company’s Tempe-based car dealerships have been engaging in a series of deceptive and discriminatory practices against their customers.
The FTC and the office or Arizona AG Kris Mayes claim that dealerships owned by Coulter Motor Company exhibited prejudiced treatment towards Hispanic consumers, as well as a campaign of underhanded sales tactics that included misleading advertising, price inflations, and unwarranted add-ons.
According to court documents, Coulter would draw in prospective customers utilizing “bait and switch” schemes by offering low sale and lease prices on their vehicles; once the customer was lured in, the price was later increased, sometimes by hundreds or even thousands of dollars. In addition, other charges were snuck into the deals without the customer’s knowledge – usually hidden in fine print or random webpage links – often creating a significant financial burden for those purchasing vehicles from the dealer.
Defendants’ advertisements on third-party websites do not mention the additional charges,” the FTC’s complaint says. “And Defendants obscure any reference to these charges on their websites at the bottom of the page, only visible if consumers scroll, or behind small gray hyperlinks appended to its advertisements. Even if a consumer were to find this information, it does not indicate whether the listed charges are part of, or in addition to, the advertised price.”
The price increases were explained away by Coulter to customers as “market adjustments” due to “market shortages,” the FTC claims. It is also alleged that the dealers would slip in numerous unrequested and expensive add-ons, such as theft protection, paint coating, and VIN etching; if a wary customer discovered these buried within the extensive paperwork, Coulter sales people would reportedly attempt to convince them that the charges were mandatory when they, in fact, were not.
Hispanic customers were also targets of being overcharged more so than others, the lawsuit claims, sometimes by as much as $1,200 when compared to other groups.
The lawsuit has offered a settlement to Coulter, whose conditions as outlined by the FTC include a cessation of all illegal sales conduct, and overhaul of the company’s business practices, and a $2.6 million fine.
Christopher Boyle is an investigative journalist, videographer, reporter and writer for SEARCHEN NETWORKS® as well as other independent news and media organizations in the United States. Christopher works on a wide variety of topics and fields, has been featured in print and online in a variety of publications, from local to national, and helps keep a keen-eye on what’s happening in the automotive world for Auto Buyers Market.