Passport Auto Pays $3.3 Million In Fee and Pricing Allegations

Passport Automotive Group paid $3.3 Million to the FTC to settle claims of illegal dealer fees and racial dealer discriminatory practices.  The FTC Complaint sets forth the allegations in detail, and is a great read to understand the practices that many dealerships may engage in on a daily basis.  This FTC article summaries the fine and provides more information about the alleged illegal practices.  Passport Automotive Group denies all liability and the FTC allegations.

Passport Auto dealerships in Maryland include:

• Passport Toyota,
• MINI of Montgomery County,
• Passport BMW,
• Passport INFINITI of Suitland,
• Passport Mazda, and
• Passport Nissan.

If you purchased a car from any Passport Dealership in Maryland, call Whitney, LLP for a free contract review. 

You may have been subjected to the illegal fees or racial dealer discrimination that the FTC alleged Passport charged its customers. We can provide a lawyer to help for problems with car dealers in Maryland. 

Here is our YouTube Channel  for more information and videos on illegal car dealer practices.

Illegal Fees added on to the Advertised Price

Many dealers in Maryland, and other states, often add illegal fees on top of the advertised price of a vehicle.

These fees are usually just excuses to to charge more, and do not reflect any actual value that was provided to the customer.

Common bogus dealer fees are:

• Reconditioning
• Certification
• Inspection
• PDI – “Pre-Delivery Inspection

Very often, nothing was actually done to the vehicle in connection with these fees, which can give rise to a fraud allegation.

If you have been charged any of these fees, you have legal rights and may be able to recover both the fee amount, interest paid on the fee, and have attorney’s fees covered.

Expensive, Inflated and Worthless Aftermarket Products

In Maryland, many dealers love to sell aftermarket products at huge markups.  These extra products are often wildly overpriced and sometimes worthless.

Examples of common overpriced aftermarket products include:

• vehicle service contracts
• lost key replacement
• dent and ding protection
• environment interior cleaners
• overpriced GAP
• LoJack
• Kahu GPS
• Sanitizing “treatments.”
• Clear-coating or other “treatments” that are never actually applied.

Similar to bogus fees, these “aftermarket products” are a profit center for dealers.  The markups are often 100%, or even more.

For example, some “sanitizing treatments” cost $20, consist of a spray applied from a spray bottle into the interior of the car before delivery, and are inflated to $1,000 or more.  This is not a fee, it is a fraud.

Whitney, LLP has handled multiple cases involving consumers being charged for bogus aftermarkets products.

Price Increases Above the Advertised Price

In Maryland, based on hundreds of cases Whitney, LLP has handled, it is rare that dealers honor the advertised price. Instead, salesmen and finance managers often make excuses to add thousands of dollars onto advertised prices.  Common excuses for price increases above the advertised price in various bogus fees, as discussed above, and excuses such as “market adjustment”, “supply and demand”, and other nonsense terms.

If a dealer refused to honor the advertised price, you have legal rights and can fight back.

Dealers do not disclose secret interest rate increases. Their profit directly hurts the consumer and forces a higher car payment.

Secret Dealer Interest Rate Markup

Many customers have no idea that lenders offer a lower “buy rate” rate to dealers, who then increase the rate offered to customers, and the dealer and lender then split the profit.

The “buy rate” is the interest rate that the lender conveys to the dealer.  Dealers often increase that rate by 2%, and split the profit with the lender.

The difference between the “buy rate” and the rate the customer is charged is often called “dealer reserve”,  “markup”, or “holding points.”

Customers are often lied to, and told that the inflated rate is the best that the lender could do.

Instead, the extra 2% interest rate is not an interest charge. it is a disguised finance charge that Whitney, LLP believes is illegal in Maryland.

It is also Whitney, LLP’s position that failing to disclose to a consumer that a lower interest rate is available, and failing to disclose that the dealer and lender are splitting profits from the increased rate, which is effectively a charge for financing the vehicle, is a deceptive practice. This article discusses this practice of interest rate markups. You may need a lawyer for problems with car dealer to help with dishonest interest rate increases.

Dealers often prey on minority customers to make huge profits.

Racial Dealer Discrimination on Fees and Interest

Finance managers who sell aftermarket products and increase interest rates often have total discretion in doing so.

How much they can charge each customer, and which customer to charge the most to, is usually based on what they think they can get away with.

Minority customers are often charged higher rates for both aftermarket products and interest rates.

If you suspect you were charged more because of the color of your skin or nationality, you have legal rights and can fight back.  Whitney, LLP can help.

Daniel Whitney, Jr. and Daniel Whitney, Sr. of Whitney, LLP

Lawyer for Illegal Dealer Fees and Dealer Discrimination – Whitney, LLP

Whitney, LLP has experience recovering compensation against dishonest car dealers in Maryland.

Whether you suspect you were charged more due to racial dealer discrimination or taken advantage otherwise, call us.

We offer Free Contract Reviews. 

Call Whitney, LLP at 410 583 8000, or use our Quick Contact Form, to discuss your potential case.

Click Here to read about past car dealer fraud settlements.
Click Here to read blogs about our other car dealer cases, including settlements and other lawsuits we filed.