Dealership Settles FTC Lawsuit for $3.3 Million

By Staff Writer October 18, 2022

The Federal Trade Commission acted against auto dealer Passport Automotive Group for deceiving consumers by tacking hundreds to thousands of dollars in illegal junk fees onto car prices and for discriminating against black and Latino consumers with higher financing costs and fees. Passport, its president, Everett Hellmuth, and its vice president, Jay Klein, will pay more than $3.3 million to settle the FTC’s lawsuit, which will be used to refund consumers harmed by Passport’s conduct.  

“With this action against Passport and its top executives, the Commission is continuing its crackdown on junk fees and discriminatory practices that harm Black and Latino consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. ”As families struggle with rising prices, companies that think they can hit consumers with hidden fees should think again.”

Passport, based in Maryland, owns car dealerships around the Washington, D.C., metropolitan area. In 2018, the FTC brought action against Passport, its president, and vice president, alleging the company mailed more than 21,000 fake “urgent recall” notices to consumers in 2015 and 2017, to lure them to visit dealerships.

In its complaint announced today, the FTC alleges that Passport regularly advertises certified, reconditioned, or inspected cars at specific prices, but then adds extra certification, reconditioning, or inspection fees that it falsely claims consumers are required to pay. The FTC also alleges that Passport charges Black and Latino consumers hundreds of dollars more in financing costs and fees, on average, than white consumers.

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Last modified on Tuesday, 25 October 2022 13:39