The complaint further alleges that the dealership discriminated against American Indian customers by adding excessive markups to their financing costs—averaging $401 more than non-Latino white customers.
The Federal Trade Commission (FTC) is set to issue more than $1 million in refunds to consumers affected by deceptive practices at Rhinelander Auto Center. In a joint effort with the State of Wisconsin, the FTC has taken action against the dealership and its general manager for allegedly charging customers unauthorized “junk fees” for add-on products and services.
According to the complaint, Rhinelander Auto Center routinely imposed these fees without customer consent, with a survey revealing that about half of its customers reported being charged for add-ons deceptively. One customer was misled into believing that Guaranteed Asset Protection (GAP) insurance was mandatory for her vehicle purchase, incurring over $1,000 in unnecessary fees and interest.
The complaint further alleges that the dealership discriminated against American Indian customers by adding excessive markups to their financing costs—averaging $401 more than non-Latino white customers. This disparity has reportedly worsened since the dealership changed ownership in 2019. American Indian customers have faced higher rates for unwanted add-ons, costing them an average of $1,362 more in credit transactions compared to their white counterparts.
“Companies must not be permitted to engage in discriminatory practices or improperly charge customers for ‘add-on’ products or services,” said Wisconsin Attorney General Josh Kaul. “Thank you to those at Wisconsin DOJ, the FTC, and other agencies whose work led to the filing of this complaint.”
As part of a proposed settlement, Rhinelander’s current owners and Towne will be required to stop deceptive practices regarding add-ons and ensure that customers provide explicit consent before any charges. They will also need to implement a fair lending program that allows consumers to seek external financing and limits additional interest markups. In total, they will pay $1 million in refunds to affected consumers.
The former owners, Rhinelander Auto Center, Inc. and Rhinelander Motor Company, have reached a separate agreement to wind down their operations and pay $100,000 for consumer refunds.
The FTC is sending checks to 7,531 consumers, who should cash them within 90 days. For any questions regarding the refund process, recipients can contact the refund administrator, Analytics, at 866-648-7161, or visit the FTC website. Importantly, the FTC emphasizes that no payment or personal information is required to receive a refund.
In 2023, FTC actions have resulted in a remarkable $330 million in consumer refunds nationwide, reinforcing the agency’s commitment to protecting consumers from unfair business practices.
