The Federal Trade Commission (FTC) and the State of Connecticut are flexing their regulatory muscles, taking action against Manchester City Nissan (MCN), an auto dealership, its owner, and several key employees. The move is an unambiguous message to the auto industry, highlighting the seriousness with which regulators are viewing allegations of deceptive practices.
MCN stands accused of systematically misleading consumers about the price of certified pre-owned vehicles, add-on products, and government fees. The complaint alleges that MCN has been charging consumers exorbitant junk fees without consent, sometimes adding up to thousands of dollars in unauthorized charges.
This development could have significant implications for auto dealers. It underscores the need for transparency in pricing and the importance of obtaining clear and informed consent from consumers before adding charges. Dealerships that fail to adhere to these principles may find themselves facing not just disgruntled customers but also regulatory scrutiny and potential legal action.
One of the major concerns raised by the FTC and Connecticut is MCN’s practice of double-charging for certified pre-owned vehicles. MCN allegedly tacks on a certification charge for vehicles already inspected and repaired to the manufacturer’s specifications—vehicles that should come with an extended warranty from the carmaker at no additional cost.
Furthermore, the complaint accuses MCN of charging consumers extra for inspections or repairs that have already been carried out. In some cases, MCN failed to report to Nissan that a certified car was sold, leaving consumers without the additional warranty promised in the dealership’s advertising.
MCN is also under fire for allegedly charging consumers for add-ons they did not agree to pay for, such as General Asset Protection (GAP), service contracts, maintenance contracts, and Total Loss Protection (TLP). TLP, according to the complaint, appears in 90 percent of all sales by MCN.
In addition, the dealership is accused of deceiving consumers about government-imposed taxes and fees, either by inflating these costs or attributing junk fees to government requirements.
The charges against MCN, its owner, and several key employees have been filed in the U.S. District Court for the District of Connecticut. The defendants face allegations of violating the FTC Act and the Connecticut Unfair Trade Practices Act.
This case could serve as a wakeup call for auto dealers nationwide. It underscores the importance of clear, honest communication with customers and the potential consequences of deceptive practices. As the FTC and state regulators ramp up their oversight of the auto industry, dealerships would be wise to ensure their practices align with legal and ethical standards. Ignoring this warning could result in serious ramifications, including legal action and damage to reputation.
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