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$3.3 million FTC settlement with Passport drives home importance of fair lending

Lesley Fair

October 18, 2022

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When it comes to the car buying process, there a world of difference between going for a test drive and getting taken for a ride. An FTC complaint against DC-based Passport Automotive Group alleges that the company deceived customers by packing junk fees onto the cost of its vehicles. According to the complaint, Passport also discriminated against Black and Latino consumers by charging them higher financing costs and fees, in violation of the Equal Credit Opportunity Act and the FTC Act. To settle the case, the defendants will pay $3.3 million and will change their business practices in ways that should cause others in the industry to take notice.

Passport operates nine dealerships in the Washington area. (And yes, if the name sounds familiar, Passport was the subject of an FTC action in 2018, charging the company with sending phony “urgent recall” notices that were really just sales promotions.) In the just-announced case, Passport ads conveyed to consumers that they could buy certain inspected, reconditioned, or certified vehicles at specific prices. However, the complaint alleges that in many instances, when a consumer tried to buy a car for the advertised amount, Passport’s double-talk – and double pricing – kicked in. Despite the claim that the advertised price included the cost of certification, inspection, etc., the FTC says Passport packed on hefty additional (and redundant) fees for those same services.

The complaint cites examples of just how Passport’s tactics walloped consumers in the wallet. For example, one Passport dealership advertised a certified pre-owned Nissan Rogue for $24,050. However, Passport later charged the buyer an additional $2,390 in fees, purportedly required for reconditioning and certification. The upshot: the consumer had to pay $26,440 due to the double charges. But the deception didn’t end there. In numerous instances, Passport falsely told prospective buyers that those extra reconditioning, inspection, preparation, and certification fees were mandatory, despite what Passport said in its ads – and despite the fact that many manufacturers’ policies prohibit dealers from separately charging for the cost of certification.

The FTC also alleges Passport violated the Equal Credit Opportunity Act and the FTC Act by imposing higher borrowing costs on Black and Latino consumers when compared to non-Latino White consumers. To put the discrimination allegations in context, here’s some background on the vehicle financing process. Dealerships like Passport often arrange financing for customers by reviewing their credit applications and credit reports, and then submitting the applications to one or more finance companies. Those companies get back to Passport with a specific “buy rate” – the risk-based interest rate the company will offer for that transaction.

In some instances, the finance company allows Passport to add another charge – called a markup. But unlike the buy rate, the markup isn’t based on the individual’s credit record. The complaint alleges that Passport’s policy was to charge a standard markup of 2%, but gave employees discretion to reduce or eliminate the markup for certain reasons. Passport supposedly required approvals and audits, but the FTC says Passport didn’t actually follow its policy.

According to the FTC, Passport’s discretionary use of markup rates – charging some consumers the markup, but not others – resulted in charging many Black and Latino consumers more than non-Latino White consumers. For example, among thousands of consumers who received financing through Passport between August 2017 and August 2020, when compared to non-Latino White consumers, Passport charged Black consumers, on average, about $291 more in interest, and Latino consumers, on average, about $235 more. In addition, Black consumers were charged the maximum markup approximately 47% more often and Latino consumers approximately 38% more often than non-Latino White consumers.

The complaint also alleges that Passport charged Black and Latino consumers even more in those tacked-on junk fees. The FTC say that when compared to non-Latino White consumers, Black consumers paid, on average, approximately $82 more and Latino consumers approximately $81.

In addition to the $3.3 million financial remedy, the proposed stipulated order will make sweeping changes in how Passport does business, including a broad prohibition on misrepresenting the costs or terms to buy, lease, or finance a car and a requirement that the defendants get consumers’ express, informed consent before charging them any fees. The proposed order explains the changes in detail, but one provision related to the Equal Credit Opportunity Act deserves particular attention. In addition to implementing a Fair Lending Program, the defendants have agreed that each Passport dealership will either charge no financing markup or will charge the same markup rate to all consumers. In other words, the defendants are prohibited from charging different groups different markups. That provision addresses the FTC concern that Passport was using the discretionary markup rate to discriminate against consumers on the basis of race and ethnicity.

There’s a lot for other companies to glean from the FTC action against Passport.

Conduct an ECOA compliance check. This is the latest in a series of recent FTC actions to enforce the Equal Credit Opportunity Act. ECOA has been the law of the land for almost 50 years and businesses have no excuse for continuing pernicious practices that violate the statute.

Corporate officers: The buck stops with you. In addition to naming corporate entities, the complaint names in their individual capacities Passport’s owner Everett A. Hellmuth, III, and Jay Klein, Vice President of seven of the Passport-related companies. The complaint explains in detail their involvement in the conduct challenged as illegal and alleges that Passport didn’t take appropriate corrective measures even when possible law violations were called to their attention. For example, according to the FTC, “Despite these multiple emails and text messages informing them of Passport’s practice of charging consumers bogus fees, Hellmuth and Klein have allowed the practice to continue.” Furthermore, Passport had received letters from finance companies raising “statistically significant differences in the markup rates charged to Black borrowers at two separate Passport dealerships,” but the FTC says Passport “took no steps to modify its discretionary markup policy or practice.”

When implementing corporate policies, practices – not paper – are what matters. According to Passport’s written policy, any deviations from the standard markup had to be recorded on a certification form, signed by the sales person, and reviewed by another employee. The written policy also required random monitoring of credit offers and periodic audits of credit sales. Sounds good on paper, but the FTC says Passport didn’t walk the walk. A document that looks nice in a file folder won’t paper over illegal practices on the sales floor.

Discriminatory conduct can be “unfair.” In addition to alleging that Passport’s discriminatory finance practices violate ECOA, the FTC alleges the practices were unfair under the FTC Act. That makes sense. Passport’s discriminatory conduct injured Black and Latino consumers’ wallets: They paid more than White consumers to finance their car. They couldn’t reasonably avoid being charged more by Passport. The FTC says Passport didn’t disclose the markups and didn’t tell the truth about the fees. And the practice of charging those consumers more doesn’t yield countervailing benefits.

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Consumer Alert

Prepare for winter weather emergencies while avoiding scams

Terri Miller

Consumer Education Specialist, FTC

October 20, 2022

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Protect your home from scammers this winter.

Scammers don’t hibernate in the winter. Just like you, they’re watching the weather reports and preparing for storms — and they’re counting on catching you unawares.

As you get ready for winter, unlicensed contractors and scammers may call, email, or knock on your door promising to inspect your furnace, repair your leaky roof, or clean your heating ducts. Once winter arrives, they’ll add snow and ice removal to their list. But sometimes they don’t deliver — and they might just take your money and run without doing some or all the work.

To stay ahead of winter weather-related scammers, and certainly before you hire a contractor who found you:

Get recommendations from people you know and trust.
Ask contractors for IDs, licenses, proof of insurance, and references before paying for services.
Search online for the company’s name with words like “scam” or “complaint.”
Pay by credit card or check, which offers you protections — never with cash, gift cards, or through wire transfer companies like Western Union or MoneyGram. And only pay in full after the work is done and you’re satisfied with it.
Get a contract — never rely on handshake deals. Make sure all promises are in writing and that you understand what you’re signing.

To learn more about ways to prepare for, deal with, and recover from a weather emergency, visit ftc.gov/WeatherEmergencies.

If you suspect a scam, report it to the FTC at ReportFraud.ftc.gov.

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Consumer Alert

Discriminatory financing and bogus fees at the car dealer? No thank you

Rosario Mendez

Division of Consumer and Business Education, FTC

October 18, 2022

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Delearship financing may not be your only option.

When car shopping, you shouldn’t be charged more than the advertised price, or more than other people because of the way you look or where you’re from. That’s wrong, dishonest, and illegal. Today the FTC announced a lawsuit and settlement with a dealership and its owners for allegedly doing just that. Now they have to pay $3.3 million to refund people harmed by their actions and change their allegedly deceptive and unfair practices.

The FTC says that Passport Auto lied to customers about car prices: for example, it regularly advertised a car for one price, but charged more when customers went to buy it. According to the FTC, the dealer illegally added additional fees for things that were already included in the advertised price, like certification, reconditioning, and inspection. But the law says they can’t do that.

If you’re in the market for a car, your options may be limited by things like supply or your budget. So that dealerships don’t take advantage:

Bring the ad to the dealer. Be sure the dealer honors the advertised price.
Shop around for financing. Dealership financing often comes with marked-up interest rates. It’s not your only option. Start with banks, credit unions, and other financing companies.
Read the sales quote and financing agreement carefully. Do the terms you agreed on match the ones in the contract? Get answers about any extra fees you don’t recognize.
Walk away if you’re not getting what you were promised. You don’t have to take the deal if you’re not satisfied.

Also, says the FTC, the dealer illegally charged Black and Latino consumers more in junk fees and financing markups than White consumers. Markups are charges dealers add on top of the interest rate when they arrange financing. The Equal Credit Opportunity Act makes it illegal to discriminate based on things like race, natural origin, and age, among others.

For more advice on car buying and financing see ftc.gov/cars. Report bad business practices when you see them at ReportFraud.ftc.gov or in Spanish at ReporteFraude.ftc.gov.

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car financing

Topics

Buying and Owning a Car

Credit, Loans, and Debt

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U.S. Equal Employment Opportunity Commission <eeoc@updates.eeoc.gov>

To:warrior_75210@yahoo.com

Thu, Oct 20 at 6:39 AM

Funeral Home and Crematory Owner Sexually Harassed Four Female Employees and Punished Them for Reporting, Federal Agency Charged

U.S. Equal Employment Opportunity Commission 131 M St. NE, Washington, D.C. 0507 www.eeoc.gov | info@eeoc.gov 800-669-4000 | 844-234-5122 (ASL Videophone)

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U.S. Equal Employment Opportunity Commission <eeoc@updates.eeoc.gov>

To:warrior_75210@yahoo.com

Wed, Oct 19 at 7:13 AM

U.S. Equal Employment Opportunity Commission 131 M St. NE, Washington, D.C. 0507 www.eeoc.gov | info@eeoc.gov 800-669-4000 | 844-234-5122 (ASL Videophone)

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Consumer Alert

Now that the student loan debt relief application is open, spot the scams

K. Michelle Grajales

Attorney, Division of Financial Practices

October 18, 2022

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The Department of Education (ED)’s application for federal student loan debt relief is now open and, of course, scammers are on the move — trying to get your money and personal information. Luckily, there are ways to stop them, so keep reading to find out how to protect yourself as you apply for relief.

As people file their applications, ED will review them on a rolling basis. Pack some patience and follow the process…not those who say they can put you in front of the line. Because those are scammers. Here’s what to know right now to steer clear of scammers:

Apply at StudentAid.gov/DebtRelief.Nowhere else.Right now, application is online only and in English and Spanish.A paper application will be available later.
Don’t pay to apply. It’s FREE. Anyone who says you need to pay is a scammer. And anyone who guarantees approval or quicker forgiveness: scam, scam, scam.
Know what to share, where, and when. The real application will ask for your name, birth date, Social Security number, phone number, and address. But, when you apply online, you don’t have to upload or attach any documents.
Know what not to share. When you apply, nobody legit will ask for your FSA ID, bank account, or credit card information. Anyone who does: scammer. (Stay tuned for more info when ED starts processing applications. Some applicants will have to verify their income, but not yet.)
Expect email updates from ED. After you apply, you may hear from ED — to upload tax documents verifying your income — or to give updates on your application. Those emails will only come from noreply@studentaid.gov

, noreply@debtrelief.studentaid.gov, or ed.gov@public.govdelivery.com

. Pay close attention the sender address for emails about loan forgiveness — looking for slight typos — to avoid a scammer’s fake emails.
Follow ED’s process if your application is denied. Anyone who says they can get you approved (for a fee) is a scammer. Your email notice will have instructions. Follow those, and if you have questions, call FSA’s dedicated phone line at 1-833-932-3439. Expect long wait times.

Have you spotted one of these scams? Tell us about it at ReportFraud.ftc.gov.

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Topics

Credit, Loans, and Debt

Education and Training

Scams

Student Loan and Education Scams

Data security applies to charitable organizations, too

Rosario Méndez

Division of Consumer and Business education

October 17, 2022

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This week is Charity Fraud Awareness Week, an effort run by charity regulators, law enforcers, and other non-profit stakeholders from across the world. It’s an opportunity to remind charities and other non-profit organizations of how important it is to secure their networks and protect any consumer data they collect from donors, employees, and others. This will help protect the organization from scammers, hackers, and identity thieves.

If you work at a charity or other non-profit organization, you’ll want to see what’s at ftc.gov/cybersecurity, an FTC website with free practical resources to help any organization implement data security strategies. This week, join others in raising awareness about the importance of maintaining an organizational culture that encourages protecting personal information by sharing the information at ftc.gov/cybersecurity with the rest of your organization’s staff. Having an informed workforce is key when it comes to protecting data. So, for example, implement measures to protect files and devices, such as:

Keep software up to date and back up your files. Set software to update automatically and create offline backups of important files. That way, you have access to them even if your network is compromised.
Require multi-factor authentication for employees to access areas of your network with sensitive information. This requires additional steps beyond logging in with a username and password — like a temporary code on a smartphone or a key that’s inserted into a computer.
Require passwords for all laptops, tablets, and smartphones. Don’t leave these devices unattended in public, even locked in a car. They may have sensitive information that, if they’re stolen, could fall into the hands of an identity thief.

It’s also important to know what to do if something goes wrong. What steps would you take to minimize the damage if you discover that your business email has been hacked? Or if someone took over your system and demanded a ransom? Read more at ftc.gov/cybersecurity, and then share within your organization.

Topics

Donating to Charity

Online Privacy and Security

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U.S. Equal Employment Opportunity Commission <eeoc@updates.eeoc.gov>

To:warrior_75210@yahoo.com

Mon, Oct 17 at 9:30 AM

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Founder/Chairman/CEO and CFO

Although, still having received many more “Awards, Honors, and Certificates of Recognition”, Nationally and Globally; MR. Reece has remained “humble & Thankful” that a “little Skinny Bullied kid from Texarkana could be blessed to have done things, never imagined by him or those who grew up with him, with still current things being done for the Betterment of Humanity.

Terry “the Warrior” Reece currently lives in Las Vegas, NV. with his Beautiful and Smart wife and keeps doing what God has for him to be doing! we “HONOR” WOMEN & MOMS, and MILITARY Females with our NEW, EXCITING “G.i.J.i.M.O.M.” Series: http://thesiborg.com/ http://familymediasite.com/ http://tdmcomics.com/ http://post-up.me/

Red Velvet Entertainment Jun 8, 2021, 7:59 PM (7 hours ago) to me, Robert, Chris Hi Terry, Thanks very much for reaching out! I was a Marine for 4 and an Army Ranger for another 5 years – much appreciated :) We are very happy to count on you as a supporter for both Morlon and our film – THANK YOU! Here is some stuff we would LOVE for you to share below: ———————————————————- Blood Pageant, LLC and Red Velvet Entertainment, Inc are proud to share Blood Pageant’s upcoming June 18th and 29th release! This has been designed to appeal to as many movie fans out there as possible while still in the time of the pandemic – for those who are still comfortable being avid theatergoers, as well as those who feel better streaming the film from home. The official press release went out on May 13th and the theatrical trailer has been “leaked” on HorrorNews.net. https://horrornews.net/166435/horror-thriller-blood-pageant-set-for-summer-release-from-vision-films/ Blood Pageant will have a theatrical release in select theaters throughout America on June 18th and will be released on Amazon and other online platforms on June 29th! (It will be released at Walmart, Target, etc. on DVD this coming July 20th; with pre-sale orders already being taken at Target). We would appreciate any additional help YOU can provide in getting the word out! Below you will find a press release, trailer, and key art for the film. Feel free to use any of this material to post about Blood Pageant and its up-coming release and continue to post throughout the month of June. Please Share the links below & Follow Us! Facebook: @BloodPageantTheMovie Instagram: @BloodPageantMovie Twitter: @BloodPageant Official Website: www.bloodpageant.com IMDB: https://www.imdb.com/title/tt7184122 Horror-Thriller ‘Blood Pageant’ Set For Summer Release From Vision Films

Terry, “the Warrior” Reece was born in Texarkana, Arkansas and raised in Texarkana, Texas. He attended Liberty-Eylau High School and Played and Starred in Basketball, although he earlier played Football and performed in Track & Field. Mr. Reece moved to Dallas Texas in 1979 and Worked his way upwards for a Well Know Automotive Service & Tire Company and worked at the South Oak Cliff, DALLAS, TEXAS; location for about 14 years, where he Built up a Positive Reputation of a “Tech Specialist”/”Master Technician/Working Service Manager/Licensed Texas State vehicle Inspector. “Forcibly-Retired” and “Discriminated Against” in Pay, and Company Recognition Listings and “Threatened, with a Dime-IN-A-Desk”, by arrogant/upper Management of that Automotive Company; MR. Reece had to utilize his $50,000 worth of his Mechanic’s tools and his 1976 Chevy PU Truck and began working as a Mobil Mechanic, then Built that to open his 1st Downtown Dallas Shop called “Jet Automotive” and very Soon, All of His Longtime Customer left that Former Major Automotive Company’s Locations and Followed Mr. Reece to his New Location on “Gould Street, in Dallas, near Downtown. (That Former Major Automotive place had to close its doors, about 10 Months later:’ Because it lost soo much Business and money; It is Still even today a Bank of America Branch Office). eventually Mr. Reece owned 4 Automotive Locations, around the Dallas, Texas Areas, including a “Former Partnership” on Duncanville Rd. with Former LA RADIERS Hall of Fame/All Pro receiver; #81= “Timmy” aka Tim Brown. Mr. Reece, quickly became one of the “Up-&-Coming” Dallas/Ft. Worth Areas; “Who’s-Who” and became Active Politically and Business and Community wise. MR. Reece served on the P & Z Board of Adjustment for the City of Lancaster, Texas and the City of Cedar Hill Texas and helped walk the streets of South Lancaster Rd. in Dallas to help with Informing Businesses of the “Coming of DART” the Dallas Area Rapid Transit Authority and D.A.R.T. Railway Systems, which you see today in Dallas (This was done for his State Senator, Royce West’s Open Meetings for the Communities, along the Proposed Routes of DART). MR. Reece became “Certified as a M.B.E.” and received some Contracts with The General Services Commissions Certifications for the Dallas County Schools, and others, and when Mr. Reece Opened a Courier/Delivery Company in 1996/1997 he Delivered, to The DFW International Airport Board, The City of Dallas, Texas, Companies like Frito Lay, Coke-Cola, too many Judges and Attorneys and other Corporations to name; All around the DFW Metro Areas. In 1993-1994/1995 Mr. Reece was “THE” Sub-Contracted Company that Helped “Automotive Technology Services, Inc.” receive the “Only Texas Department of Commerce; Smart Jobs Grant ever obtained by a Minority Company” and MR. Reece, acted as “the ACTING DIRECTOR of EDUCATION” where he wrote the “Curricula”, Recruited the Students; Women/& Men, Wrote the Student Handbook, Wrote the “Student Handbooks” and Sometimes “Taught and Trained the Students in “Ft. End a Suspensions & Alignments”, “Engine Performance & Emissions”, “Engine Repairs”, “Automotive AC & Heating” and “Automotive Electrical”; all of which MR. Reece held ASE National Automotive Certifications and even briefly taught the Same Subjects for ATI (Automotive Trades Institute) in Dallas.)…in 2001, after Dating his current wife (Julia) for over 2 1/2 years Long-Distance; Mr. Reece and Julia married and he relocated to Detroit, Michigan, where he lived pretty much “Incognito” and worked small Jobs and then Completely Revamped his Companies into what you find today as; ®Reece ENTERPRISES/©REECENETRICS™/®FAMILY MEDIA COMPANY™/©TDM Comics International; a small but slowly/Strategically growing group of Companies, Creating Comics, and Entertainment Products & “Brands” geared Towards the World Wide Diverse People, of many Cultures and Nations to “spread the love of Positive Images for peoples of All Colors, Worldwide!”… ®Reece ENTERPRISES/©REECENETRICS™/®FAMILY MEDIA COMPANY™/©TDM Comics International, utilizes Global “Strategic Partnering” and relationships and friendship building as the primary strategies for continually building the group of Companies and associated relationships. AS a 1996-1997 Graduate of “LEADERSHIP SOUTHWEST” in Southern Dallas County; MR. Terry “the Warrior” Reece was Trained in Global, Local, Community Economic Development and Political Policies and was “Groomed” to run for Public Office in Southern Dallas County and Graduated with an “Official State of Texas Gold-sealed Diploma of Completion, along with that 1996-1997 Graduating Class and Mr. Reece help Found and Served on two Not for Profit Organizations in Dallas; (the Friends of Red Bird Airport and “Positively Oak Cliff”). MR. Reece has Numerous “Copyrights & Potential Inventions” and also Served on the Texas R & B Music Association Board, during a period in 1996-2001. During the years of 1979—2001, Mr. Terry Reece, WAS INVOLVED on many formidable Communities improvements and currently modern day Dallas Areas major projects, including D.A.R.T., THE TRINITY RIVER AUTHORITY PROJECT PLANNING, THE 30-YEAR DALLAS PLAN, NAFTA, AND THE EMERGING OF “PUBLIC/PRIVATE PARTNERSHIPS, IN THE DFWAREA. MR. REECE WAS ALSO VERY ACTIVE IN SEVERAL CHAMBERS OF COMMERCE, INCLUDING THE DUNCANVILLE CHAMBER, THE LANCASTER CHAMBER, THE TRI-CITY CHAMBER, THE DALLAS CHAMBER, AND THE USA CHAMBER.
Although, still having received many more “Awards, Honors, and Certificates of Recognition”, Nationally and Globally; MR. Reece has remained “humble & Thankful” that a “little Skinny Bullied kid from Texarkana could be blessed to have done things, never imagined by him or those who grew up with him, with still current things being done for the Betterment of Humanity.
Terry “the Warrior” Reece, ALSO A SELF-PUBLISHED WRITER/CREATOR/AUTHOR OF TDM COMICS INTERNATIONBAL COMICS-NOVELS AND A SMALL MEDIA COMPANY, AND EVENTS AND MUSICAL CONCERTS PROMOTOR; currently lives in Las Vegas, NV. With his Beautiful and Smart wife and keeps doing what God has for him to be doing! We “HONOR” WOMEN & MOMS, and MILITARY Females with our NEW, EXCITING “G.i.J.i.M.O.M.” Series: http://thesiborg.com/ http://familymediasite.com/ http://tdmcomics.com/ http://post-up.me/
I am always seeking to work with a group of "Positive" People, within Our New Chosen Communities in Las Vegas, NV. And GLOBALLY.
Terry “the Warrior” Reece: VETERANS AND GOVERNMENT AFFAIRS COORDINATOR Home Office: Based in Las Vegas, Nevada
E-mail: warrior_75210@yahoo.com and/or reecewarriorlv@gmail.com
http://reeceenterprises.us http://familymediasite.com/ http://tdmcomics.com/ http://post-up.me/ https://www.amazon.com/-/e/B003VPV7NU
Recently served on the SOUTHERN NEVADA *ECONOMIC DEVELOPMENT COMMITTEE, *THE EDUCATION COMMITTEE, AND *THE TRANSPORTATION COMMITTEE.
NVHBG/Nevada Hispanic Business Group: Past Advisory Board Director of Diversity and Inclusion & (Past Acting Director)
The Mayor's Committees for:
CITY OF LAS VEGAS YOUNG PROFESSIONALS FUTURISTIC COMMITTEE FOR Workforce Development
Iconic Las Vegas: Create iconic spaces for residents, visitors and businesses
®Reece ENTERPRISES/©REECENETRICS™/®FAMILY MEDIA COMPANY ™/©TDM
Comics International DBA FAMILY MEDIA COMPANY
Is registered as a Disadvantaged Business Enterprise and Small Business Enterprise in the
Nevada Unified Certification Program
Under the Provisions of 49 CFR Part 26

1/ONE OF MY GREATEST AND HUMBLE HONORS, WAS TO SERVE ON PRESIDENT BARACK OBAMA’S “HONORARY KITCHEN CABINET”!
Terry “the Warrior” Reece …

TERRY'S BIO