Bronx Honda dealership to pay $1.5M for discriminating against Hispanic, black buyers

Bronx Honda
Photo credit Google Street View

NEW YORK (1010 WINS) -- Bronx Honda auto dealership and its general manager, Carlo Fittanto, will pay $1.5 million to settle Federal Trade Commission charges they discriminated against black and Hispanic car buyers and engaged in other illegal business practices.

According to a complaint from the FTC, sales agents were told to charge higher financing markups and fees to black and Hispanic customers.

The dealership told its employees that due to their limited education, these groups should be targeted.

Employees were also told not to attempt those same practices with non-Hispanic white consumers, the complaint adds.

According to the complaint, black and Hispanic customers paid more for financing than similarly situated non-Hispanic white consumers.

African-American customers were charged approximately $163 more in interest than similarly situated non-Hispanic white consumers, while Hispanic consumers were charged about $211 more in interest, the complaint alleges.

The dealership is also charged with other illegal practices in the advertising and sales process that caused consumers to pay substantially more than they expect.

According to the complaint, the defendants:

  • failed to honor advertised sale prices, inflating the cost through a variety of methods;
  • changed the sales price on paperwork in the middle of the sale without telling the consumer, a practice the defendants internally referred to as adding “air money” to the contract;
  • double-charged consumers for taxes and fees without their knowledge; and  
  • told consumers that they had to pay thousands of dollars in unnecessary fees to purchase “certified pre-owned” cars that were not required by that program.

The complaint also alleges that the defendants violated the FTC Act, the Equal Credit Opportunity Act (ECOA), and the Truth in Lending Act (TILA).

The $1.5 million payment will be used to compensate its consumers and will additionally prohibit Bronx Honda and Fittanto from misrepresenting the cost or terms to buy, lease, or finance a car, or whether a fee or charge is optional.

The defendants will also be required to establish a fair lending program that will and cap the amount of additional interest markup they can charge consumers.