FTC Settles Dealer Fraud Case

By Staff Writer August 02, 2021
 Tate's Auto Group went out of business in 2019 after filing for Chapter 11 bankruptcy following the FTC complaint against the company. Tate's Auto Group went out of business in 2019 after filing for Chapter 11 bankruptcy following the FTC complaint against the company.

The FTC reached an agreement with Richard Berry, the owner of a group of bankrupt auto dealerships in Arizona and New Mexico, to resolve charges that he and the dealerships deceived consumers and falsified information on vehicle financing applications.

Many of the affected consumers were members of the Navajo Nation.

“When Berry’s auto dealerships falsified income and down payment information to qualify people for loans they couldn’t afford to pay back, they set people up for failure – including default, repossession, and ruined credit,” said Samuel Levine, acting director of the FTC’s Bureau of Consumer Protection. “That’s why the FTC sued Berry and his dealerships.”

Rick Berry ex-owner of Tate's Auto.

The FTC reached an earlier settlement with the four dealerships: Tate’s Auto Center of Winslow, Tate’s Automotive, Tate Ford-Lincoln-Mercury, and Tate’s Auto Center of Gallup. If approved by the district court, the present settlement against Berry would result in a $450,000 payment to the FTC and conclude the FTC’s case. The settlement also included a stipulated dismissal of relief defendant Linda Tate, which has been entered by the court.

The FTC’s complaint, filed in August 2018, alleged that the defendants falsified consumers’ income and down payment information to get vehicles financed and engaged in unlawful advertising. In an earlier ruling in the case, the judge found that the defendants violated the Truth in Lending Act (TILA) and Consumer Leasing Act (CLA) by failing to disclose legally required information in their advertisements.

In addition to the $450,000 payment, the proposed settlement prohibits Berry from misrepresenting information in documents associated with a consumer’s purchase, financing, or leasing of a motor vehicle, and misrepresenting the costs or any other material fact related to vehicle financing. The proposed order also requires Berry to provide consumers sufficient time to review and obtain a copy of the relevant vehicle financing documents and prohibits him from violating the TILA and CLA.  

Rate this item
(1 Vote)
Last modified on Monday, 09 August 2021 13:41