In a sweeping move to protect consumers from deceptive and discriminatory business practices, Arizona Attorney General Kris Mayes, in collaboration with the Federal Trade Commission (FTC), has taken decisive action against Coulter Motor Company. The Arizona-based auto dealer, known for operating Coulter Cadillac Tempe and Tempe Buick GMC, has been accused of a range of unethical practices, including deceptive pricing and discriminatory treatment of Latino customers.
The lawsuit, announced on August 15, 2024, alleges that Coulter Motor Company, along with its former general manager Gregory Depaola, engaged in misleading tactics to inflate vehicle prices and target Latino buyers with higher fees. The result: Coulter and Depaola have been ordered to pay $2.6 million, the majority of which will be used to refund consumers who fell victim to these unlawful actions.
According to the complaint, Coulter advertised vehicles online at significantly discounted prices, only for consumers to discover, upon arriving at the dealership, that the advertised prices were not honored. Instead, they were hit with unexpected “market adjustments,” mandatory add-ons, and other fees, often totaling hundreds or even thousands of dollars above the advertised cost. These add-ons included services like vehicle identification number etching, window tinting, nitrogen-filled tires, and theft recovery services, which Coulter falsely claimed were required purchases. Shockingly, a survey revealed that 92% of customers were charged for at least one add-on without their consent or under the false belief that it was mandatory.
Attorney General Mayes expressed outrage over the dealership’s practices, stating, “Coulter’s deceptive and discriminatory practices are unacceptable. Arizonans should be able to buy a car without being misled or charged more because they are Latino. My office will not tolerate this kind of predatory behavior, and we will do everything we can to stop these unfair practices and protect Arizona consumers.”
The FTC echoed these sentiments, with Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, emphasizing the broader impact of such practices. “Coulter used junk fees and other illegal tactics to drive up prices for consumers, especially Latino consumers. The FTC will continue cracking down on practices that drive up prices, cheat consumers, and undercut honest sellers,” Levine asserted.
The lawsuit also revealed that Latino customers were routinely charged nearly $1,200 more than their non-Latino White counterparts in interest and add-on fees. This blatant discrimination is a key focus of the settlement, which includes measures to prevent such practices in the future. Coulter is now required to implement a comprehensive fair lending program, which includes the appointment of a fair lending officer, employee training, and strict policies regarding fee and markup charges
