Federal Trade Commission reaches $450,000 settlement in auto dealership case
GALLUP — The Federal Trade Commission has reached a $450,000 settlement with the owner and manager of a now-defunct group of auto dealerships that allegedly deceived consumers in the sale, lease and financing of automobiles in Arizona and New Mexico.
Richard Berry, owner and manager of Tate's Auto Group, agreed to the payment and other stipulations over misrepresenting portions of the vehicle purchasing process, mainly financing, according to an FTC press release.
Berry was one of two people accused of falsifying consumers' income and information about down payments to have vehicles financed at dealerships under the Tate name in Gallup and in Winslow, Holbrook and Show Low in Arizona. They are also accused of engaging in unlawful advertising.
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The FTC filed its complaint in 2018 against Berry and Linda Tate, owner and president of Tate's Auto, in the U.S. District Court of Arizona.
The press release states that if the district court approves the settlement then the FTC would receive Berry's payment and conclude the case.
The settlement also prohibits Berry from misrepresenting information on documents associated with a consumer's purchase, financing or leasing of a vehicle and misrepresenting costs or any other material related to vehicle financing.
He is also required to provide customers sufficient time to review and obtain copies of financing documents. The settlement included a stipulated dismissal of Linda Tate.
A. Daniel Coumides, one of Berry's attorneys, had no comment about the settlement when reached on July 30.
The 31-page complaint outlined practices used throughout the four dealerships to deceive consumers – a majority of whom were members of the Navajo Nation – into vehicle purchases.
One example in the complaint stated that a customer told Tate's Auto that she had a fixed monthly income of approximately $1,200 and, without her knowledge, the dealership inflated her income to $5,200 on the financing documents.
Another example of alleged wrongdoing involved a consumer who was unemployed but earned between $100 to $200 from jewelry sales.
This customer reported that her financing application falsely claimed she had a monthly income of $3,889 from a business she did not work at.
"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," Samuel Levine, acting director of the FTC's Bureau of Consumer Protection, said in the press release.
In 2014, the Navajo Nation Human Rights Commission released a report that assessed the abuse of Navajo consumers when buying vehicles from dealerships in border towns.
The report stated that the human rights commission received more complaints about Tate's Auto than any other dealership.
The commission shared its report findings with the FTC, which helped in detailing the alleged abuse by Tate's Auto.
"The commission encourages Navajo consumers to take the necessary time to make a decision while making a large purchase because to get a corrective action may take years to get a final answer. The commission is hopeful some amount of money from the Tate's settlement would go back to the Navajo consumers from Tate's Auto inappropriate dealing," Leonard Gorman, executive director of the Office of Navajo Nation Human Rights Commission, said.
Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636 or by email at firstname.lastname@example.org.
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