'Payment Packing': The Sales Tactic Behind the FTC's Case Against Three Texas Dealerships

The Federal Trade Commission is acting against a large automotive dealer group, Asbury Automotive, for systematically charging consumers for costly add-on items they did not agree to or were falsely told were required as part of their purchase — and for allegedly discriminating against Black and Latino consumers by targeting them with unwanted and higher-priced add-ons.DOCUMENTED

The administrative complaint names three Texas dealerships owned by Asbury — David McDavid Ford Ft. Worth, David McDavid Honda Frisco, and David McDavid Honda Irving — along with Ali Benli, who served as general manager of those dealerships.DOCUMENTED

How "payment packing" worked

According to the complaint, the dealerships used a tactic known as "payment packing," in which sales staff convinced consumers to agree to monthly payments larger than what was actually needed to cover the negotiated price of the car — and then "packed" add-on products and services into the sales contract to make up that difference, without the buyer necessarily realizing what the extra amount was actually paying for.DOCUMENTED

The add-ons involved ranged from supposedly protective chemical coatings and extended service contracts to life and disability insurance policies, according to the complaint.DOCUMENTED Consumers reported being charged thousands of dollars for these products without their knowledge; some said salespeople never discussed the add-ons at all during the sales process, while others said they specifically declined the products only to discover later that the charges had been added anyway.DOCUMENTED

A compensation structure built around add-on attachment

The complaint alleges the misconduct was not incidental to individual rogue salespeople but reflected policies set by Asbury itself: "Under the policies set by Asbury, employees receive additional compensation for add-on charges, including bonuses that managers earn when a certain percentage of the dealer's sales include an add-on."DOCUMENTED A survey across the three dealerships found that between 58 and 75 percent of consumers charged for at least one add-on either hadn't agreed to purchase it or had been falsely told it was a required part of the sale.DOCUMENTED

The discrimination allegations

Beyond the add-on practices, the FTC alleges the dealerships violated the Equal Credit Opportunity Act by discriminating against Black and Latino applicants in financing, imposing higher costs on them than on similarly situated non-Latino white applicants.DOCUMENTED According to the complaint, McDavid Fort Worth charged Latino consumers on average approximately $169 more for the same add-ons than non-Latino white consumers, while McDavid Honda Frisco charged Black consumers on average approximately $298 more.DOCUMENTED

Salespeople convinced buyers to accept a monthly payment larger than the car required — then quietly filled the difference with add-ons the buyer often never discussed or specifically declined.

What happens next

"The FTC will continue to crack down on illegal hidden fees and discrimination, which have no place at car dealerships," said Samuel Levine, then-Director of the FTC's Bureau of Consumer Protection, framing the action as consistent with the agency's broader Combating Auto Retail Scams (CARS) Rule initiative.DOCUMENTED Because the FTC issued an administrative complaint rather than a settlement, the case proceeds to a hearing before an in-house administrative law judge in Washington, D.C., to determine whether the agency should issue an injunction barring Asbury from continuing the alleged conduct.DOCUMENTED

Asbury subsequently filed its own lawsuit against the FTC and its commissioners in federal court in Texas, seeking to enjoin the administrative proceeding and arguing that its structure is unconstitutional — a challenge that, as of this writing, a federal court has allowed to continue alongside the underlying administrative case rather than halting it outright.REVIEWED Because both proceedings remain active, the underlying allegations against Asbury, its three named dealerships, and Benli have not been resolved.REVIEWED

Why the internal survey data matters to the case

The complaint's reliance on a customer survey conducted across the three dealerships — rather than solely on individual consumer complaints filed with the FTC — reflects a common evidentiary strategy in cases alleging systemic sales practices: a survey showing that a majority of a dealership's own customers report the same unauthorized charge pattern is harder to dismiss as a series of unrelated employee errors than any single complaint would be on its own.REVIEWED Combined with the compensation-structure allegation — that managers earned bonuses tied to add-on attachment rates — the complaint builds a case that the practice was, in the FTC's telling, a designed feature of how the dealerships operated rather than a side effect of individual salespeople acting on their own initiative.REVIEWED

Consumers who purchased a vehicle from any of the three named dealerships and believe they were charged for an add-on they didn't authorize can file a complaint with the FTC at ReportFraud.ftc.gov, which the agency may use as evidence in the ongoing administrative proceeding.REVIEWED

Unlike the Coulter Motor Company case, which resolved through a negotiated settlement, Asbury's matter is proceeding through the FTC's internal adjudicative process — a distinction that will determine whether any eventual order against Asbury results from a full evidentiary hearing before an administrative law judge rather than terms the company agreed to voluntarily. That distinction can matter for how much detailed factual findings, as opposed to negotiated compliance commitments, ultimately become part of the public record in the case.REVIEWED

The dual litigation tracks — Asbury's constitutional challenge running alongside the underlying administrative complaint — reflect a broader wave of legal challenges companies have raised against the FTC's in-house adjudication process in recent years, arguing that resolving cases before the agency's own administrative law judges, rather than in an ordinary federal court before a jury, raises separation-of-powers and due-process concerns. Whether those arguments ultimately succeed will affect not just Asbury's case but potentially the FTC's broader authority to bring administrative complaints in future consumer-protection matters.REVIEWED

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