FTC Charges Dealers with Lying on Credit Applications

By Staff Writer August 02, 2018

The Federal Trade Commission took its first ever action against car dealers alleging income falsification.

The FTC has charged a group of four auto dealers with a range of illegal activities, including falsifying consumers’ income and down payment information on vehicle financing applications and misrepresenting important financial terms in vehicle advertisements.

The complaint also names the dealerships’ owner and manager, Richard Berry, as a defendant, and owner and president, Linda Tate, as a relief defendant.

All the dealerships operated in Arizona and New Mexico, near the border of the Navajo Nation. The four dealerships named in the complaint are Tate’s Auto Center of Winslow, Tate’s Automotive, Tate Ford-Lincoln-Mercury, and Tate’s Auto Center of Gallup.

According to the complaint, Tate’s Auto has sought to increase its sales by falsifying consumers’ monthly income and down payments on financing applications and contracts submitted to third-party financing companies for at least four years.

The FTC charges that, during the sales process, Tate’s Auto asked consumers to provide personal information - including their name, address, and monthly income - and told consumers they would submit the information to financing companies.

According to the complaint, however, instead of using consumers’ actual information, in many cases Tate’s Auto falsely inflated the numbers, making it appear that consumers had higher monthly incomes than they really did. Tate’s Auto often inflated the amount of a consumer’s down payment as well, according to the complaint.

Last modified on Thursday, 02 August 2018 17:29

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