KPA: payment packaging, fraud vigilance, big problems for F&I
For example, it costs $400 a month to buy a vehicle, but the dealership tells the consumer it’s $500, according to Daly. Such inflation could stem either from a shadow interest rate or from the cost of products added to the transaction but not disclosed to the customer, Daly said, believing that both payment wrapping practices occurred with frequency. equal.
“For me, dealerships inherently do that on a regular basis,” Daly said.
Daly, a former dealership employee, recalled being instructed on his first sale to add products to a payment and not tell the customer. After asking if it was illegal, Daly was told, “’We were never caught.’ “
When behavior resembling payment packaging is brought to a dealership’s attention, the retailer will say that was not the intent, Daly said. But from the government’s point of view, “where there is smoke, there is fire”.
According to Daly, enforcement of payment packaging by the Federal Trade Commission and state attorneys general has dropped under the Trump administration. But the laws remain on the books, and KPA has seen an increase in private litigation during this time — lawsuits that have led the FTC or state attorneys general to take action.
“It didn’t start at the state level or at the federal level,” he said.