Passport Auto Group Fined $3 Million By the FTC for Illegal Junk Fees and Discriminatory Practices

October 19, 2022

Just months after the Federal Trade Commission (FTC) took legal action against Koons Kia and Napleton dealerships, the FTC has reached a high-dollar settlement with the DC-area’s Passport Automotive Group. The FTC found evidence that Passport Auto Group dealerships were routinely deceiving consumers by forcing thousands of dollars in illegal junk fees onto car prices and for discriminating against Black and Latino consumers with higher financing costs and fees.

Passport, its president, Everett Hellmuth, and its vice president, Jay Klein, will pay more than $3.3 million to settle the FTC’s lawsuit. The settlement money will be used to refund impacted consumers.

Passport Automotive Group operates nine dealerships in 2022:

  • Passport Toyota
  • MINI of Alexandria
  • Passport Nissan of Alexandria
  • Passport INFINITI of Alexandria
  • MINI of Montgomery County
  • Passport BMW
  • Passport INFINITI of Suitland
  • Passport Mazda
  • Passport Nissan

“With this action against Passport and its top executives, the Commission is continuing its crackdown on junk fees and discriminatory practices that harm Black and Latino consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “As families struggle with rising prices, companies that think they can hit consumers with hidden fees should think again.”

The FTC has been on a roll in 2022. This summer, the FTC proposed a new set of rules that would ban specific anti-consumer sales practices that are commonly employed at car dealerships. Dealer lobbies were furious.

Evidence of Discriminatory Practices

The FTC’s investigation found that at Passport dealerships, Black and Latino consumers paid on average $235 to $291 more in interest than non-Latino white consumers did. It also alleges that Black and Latino consumers were charged an extra fee 42 percent more often.

The FTC announced that it is taking the following enforcement actions:

  • Fining Passport Automotive Group $3.3 million
  • Prohibiting Passport from charging different groups different markups
  • Prohibiting them from deceiving consumers about prices and fees

The Commission vote to file the complaint was 4-1. Interestingly, one Commission member, Noah Joshua Phillips, voted no on the motion.

Passport Auto Group In Trouble Again

In 2018, the FTC alleged that Passport Auto Group issued fake “urgent recall” notices to consumers to lure them to visit dealerships. According to the FTC, the vast majority of the vehicles covered by the notices did not have open recalls. 

Will Passport Auto Group’s second run-in with the FTC be enough to put an end to deceptive, anti-consumer practices? $3.3 million is quite the hefty fine. 

Koons Kia Fined $1 Million by Maryland Attorney General for Fake Fees

Get the most when you sell your car.

Compare and choose multiple offers in minutes:

COVERAGE YOU CAN TRUST

YAA Extended Warranty

Peace of mind without the markup.
Flexible terms & pricing.
Coverage details

 

Discover the right insurance for you

Compare different providers with no spam phone calls:

Call us 855.786.1144

M-F: 8AM – 9PM EST
Sat: 10AM – 6PM EST

Save more with YAA+

YAA+ Membership pays for itself for all things auto.

Unlimited access to YAA car buying tools, our team of Auto Experts, savings on maintenance, and repairs, and more.

Join YAA+
Learn More

Join YAA for Free

Get instant access to members-only resources.

We'll email you updates
Or, we can text you
Hidden
Subscribe to receive:

Save Money & Time On All Things Auto

Join 180,000 other YAA members who are saving.

FREE Membership

100% FREE

Guides and tools for car buying, selling, and ownership

Includes:

  • Learn how to buy a car with leverage and confidence
  • Communicate with like-minded car buyers, owners, and sellers in one place
  • Get the latest money-saving tips on finance, insurance, repairs, and more

Learn more

YAA Membership

$59.99 one time

3 months access to YAA's auto experts to help you get the best deal

Everything in the Free Membership, and:

  • Live coach to review your car deal
  • Trade in your car using the real values car dealers use
  • Access unlimited market price reports to compare deals
  • Strike a conversation with dealers using pre-made email templates

Learn more

YAA+ Membership

$120 per year

Members-only discounts and savings for all things auto

Everything in the YAA Membership, and:

  • Live coach to help with selling, insuring, repairing, or general car questions
  • Exclusive 25% discounts on maintenance & repairs from big names like Pep Boys and Meineke to neighborhood shops
  • Schedule, read reviews, compare estimates and select from vetted service centers entirely online
  • Members-only discounts

Learn more

🎉 Popular

Auto insights. Right in your inbox.

We'll email you updates
Or, we can text you
Hidden
Subscribe to receive:

Get the latest trends and money-saving strategies, once a week.

We'll email you updates
Or, we can text you
Hidden
Subscribe to receive:

Related articles

Will Car Prices Drop in 2023?

Will Car Prices Drop in 2023?

The last six months of 2022 brought softening car prices after 18 months of gains. Used car prices are down 17% at the...

0 Comments

Submit a Comment

Your email address will not be published.

Share This