FTC: Car dealer ripped off consumers in Arizona and New Mexico– many members of the Navajo Nation

The FTC announced today that the agency has” reached an agreement with Richard Berry, the owner and manager 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.”

According to Samuel Levine, Acting Director of the FTC’s Bureau of Consumer Protection, “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. That’s why the FTC sued Berry and his dealerships.”

In a news release, the FTC stated the following:

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 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.”

Unfortunately, this is not an isolated case. Car dealers are notorious for targeting people of color — including indigenous Americans, recent immigrants, and others they consider vulnerable — and cheating them, causing severe hardship and sometimes homelessness when their victims lose their only means of transportation to work / schooling / child care / medical care.

How can you avoid falling prey to a predatory auto dealer?  Don’t even go there. Here are CARS’ tips for how to navigate the private market, and avoid the headaches and heartaches of buying at a “stealership.”

Do you live where wildfires pose a threat? Beware of CarMax and their firebomb cars and trucks!

Since 2015, auto manufacturers have recalled more than 26.5 million vehicles due to defects that can cause them to burst into flames. Some manufacturers recommend that the owners park the cars outside, where they may be less likely to burn down homes.  Recently, General Motors warned owners of 2017 – 2019 Chevy Bolts with faulty batteries they should park them outside, after battery fires erupted in Bolts.

But beware: if you buy an unrepaired, recalled firebomb car from a car dealer like CarMax, and it catches on fire and burns down your home, or destroys a whole town, they will try to pin the blame on you.

This is a lesson that Californian Anthony Santos found out the hard way, after a Ford F-150 pickup he purchased from CarMax caught on fire in his driveway and caused over $200,000 in damage to the pickup, his garage, and his home. Fortunately, he and his children were able to escape the flames.

Before he bought the pickup from CarMax, Ford had issued a safety recall because the truck had a dangerous defect that made it prone to catching on fire without any warning.

CarMax failed to get the FREE safety recall repair done before selling the pickup to Mr. Santos. Despite neglecting to get the repairs done, CarMax advertised that the pickup had passed CarMax’s “125 point inspection.” This of course would lead car buyers to believe that it must at least be safe and free from known, hazardous safety recall defects.

After the truck caught on fire, CarMax tried to pin the blame on Mr. Santos for not finding out about the recall, taking his truck to a Ford dealership, and getting the safety recall repair done himself. Mr. Santos fought back and sued CarMax, but eventually the huge, publicly traded auto dealership chain won, on a technicality.

Bottom line: Buying cars from CarMax is risky, especially if you live where there’s a serious threat of wildfires.

P.S. Another hazard: Sometimes car buyers have experienced lengthy delays in getting safety recalls fixed, due to severe shortages of repair parts.  CARS has heard from unfortunate car buyers who ended up waiting over a year for a repair. Meanwhile, they were afraid to drive their own cars. In some states, legislators have introduced bills to make driving your own car illegal, if the safety recall repairs haven’t been done.

Learn more: NBC Bay Area: Risks of Buying a Used Car and What the Dealership Isn’t Telling You