The Federal Trade Commission said on Friday that a group of car dealers in Arizona and New Mexico must stop business as part of a court-approved solution to agency fees that dealers deceived consumers and falsified vehicle financing application information.  In a case filed in 2018, the FTC claimed the dealers Tates Auto Center of Winslow Inc. in Winslow, Arizona; Tates Automotive Inc .; Tate Ford-Lincoln-Mercury Inc., the Tates Auto Center of Gallup Inc., and Richard Berry, a dealer, falsified consumer income and payout information about vehicle financing applications and distorted important financial terms in vehicle ads. It said that the case continues against Mr. Berry and another respondent.
The FTC stated that the resident defendants are now in Chapter 7 bankruptcy proceedings and under the control of a bankruptcy trustee. The settlement includes a $ 7.2 million monetary judgment against the defendants and makes the Commission a precarious claim in the bankruptcy proceedings.
The statement states that the settlement prohibits the trustee from selling consumer information held by the respondents as part of the liquidation of the company's assets and the trustee must either destroy the information or submit it to the Commission for destruction.
Andrew Smith, director of the FTC's Bureau of Consumer Protection, said in a statement: "These car dealers sent false applications to finance companies to qualify consumers for car loans they could not afford, exposing consumers to default and takeback.
A lawyer for the dealers did not immediately respond to a request for comment.