Tempe car dealership settles complaint for $2M; still defends its business practices
TEMPE, Ariz. - An Arizona car dealership is settling a complaint alleging it engaged in deceptive sales practices that had customers paying more for their cars.
The Arizona Attorney General (AG) hopes this action sends a message, while the owners of Coulter Buick GMC Tempe are defending their business.
The Federal Trade Commission and the AG's office call the alleged sales tactic a "bait and switch," saying it advertised a car's online price as lower, then added over $4,000 in add-on fees and interest rates. The complaint also accuses the dealership of discriminating against Latinos.
The dealership settled the complaint for over $2 million, but insists none of the allegations are true.
"It’s unfair and unacceptable for any car dealership to engage in deceptive pricing," said Arizona AG Kris Mayes.
She believes the practices have been happening for at least five years.
"They would end up driving off after having paid $4,000 dollars or more in add-ons, or interest rate charges that they were not expecting, and in some cases, didn’t even know about," she said.
The complaint claims add-ons included items such as VIN etching, window tinting, and nitrogen-filled tires.
"A survey of consumers who purchased or leased cars from Coulter found that 92% of the consumers surveyed were charged for at least one add-on without their authorization, or that they thought was required," a news release from the AG's office said.
Mayes also says Latino customers paid nearly $1,200 more in add-on charges and interest than their white counterparts.
Operations director Lindsey Coulter claims the complaint is not accurate.
"This store, 40% of our employees are Latino. To have something like that out there is just very hurtful as a company," she said. "We dispute all of the allegations."
The dealership says the findings are based on what they call "unreliable statistics" that don’t line up with the business numbers they track.
"There is no upcharge of up to $4,000. The information they have, I’m not exactly sure where they are coming up with it," she said.
A portion of a news release from the dealership says, "It should be noted that two of the five FTC Commissioners dissented on the discrimination claims."
Despite this, the company agreed to settle.
"We just felt, financially, it was more responsible for us to settle and to move on from it," Coulter said.
Brian Newman, who owns Newman Auto Network, has no connection to the claim, but suggests changes industry-wide are necessary to rebuild customer trust, as many dealerships are accused of these types of allegations.
"I’m not surprised at all," he said of the allegations. "This is what happens in most dealerships around the state, if not the country."
The Arizona AG’s Office says those who believe they were impacted can reach out to the office for a refund.
The dealership stresses its nearly 30-year history in Tempe with an A+ rating from the Better Business Bureau.
"The vast majority of customers who purchase a new vehicle at the Coulter Tempe dealership have that vehicle serviced there. Indeed, repeat customers are central to Coulter’s business model," the dealership said in a news release.