On October 24, 2023, the Federal Trade Commission and the State of Wisconsin took action against Wisconsin auto dealer group Rhinelander Auto Center, its current and former owners, and general manager Daniel Towne for deceiving consumers by adding illegal junk fees onto car prices. In addition, the car dealer was found discriminating against American Indian customers by charging them higher financing costs and fees.
The FTC and Wisconsin DOJ alleged that Rhinelander and Towne regularly charged many of their customers junk fees for “add-on” products or services without their consent. The complaint cites one survey of Rhinelander customers that shows half of the dealer’s customers said they were charged for add-ons without authorization or through deception. Rhinelander and Towne also discriminated against American Indian customers in the cost of financing by adding more “markup” to their interest rates, according to the FTC’s complaint. The additional markup cost American Indian customers $401 more on average compared to non-Latino white customers. In addition, American Indian customers were charged for unwanted add-ons at a higher rate than non-Latino white customers.
The defendants have agreed to proposed court orders that will require Rhinelander’s current owners and Towne to stop their unlawful practices and provide $1.1 million to be used for refunds to consumers. The former owners, Rhinelander Auto Center, Inc. and Rhinelander Motor Company, have also agreed to a separate settlement that would require the companies to permanently wind down the businesses and pay $100,000 to be used to refund affected consumers.
Read the FTC’s press release here.
The consent order can be found here.
