A joint complaint with state of North Carolina and the Department of Justice filed today alleges that dealerships in Charlotte, NC, targeted African-American customers for unfair and predatory credit practices that violated federal and state law.
The defendants Auto Fare Inc., Southeastern Auto Corp. and Zudhi A. Saadeh, the owners and operators of two “buy here, pay here” used-car dealerships in Charlotte violated the federal Equal Credit Opportunity Act by intentionally targeting African-American customers for the extension and servicing of installment sale contracts on unfair and predatory terms. The State of North Carolina also alleges that the defendants’ actions violated the state’s Unfair and Deceptive Trade Practices Act.
The defendants engaged in a pattern of “reverse redlining” by targeting African-American customers for installment sale contracts with inflated sales prices, down payments, and interest rates without meaningfully assessing the customers’ credit.
The complaint states that Saadeh, who operates Auto Fare and United Car Sales, has used racial slurs to refer to African-Americans and made statements expressing his views that African-American customers have fewer credit order viagra soft tabs options, making them more likely to accept the predatory terms of the contracts offered by the defendants.
The defendants’ practices resulted in rates of default and repossession that are higher than other subprime used-car dealers. The complaint also alleges that the defendants failed to provide customers with a reasonable notice of repossession, repossessed vehicles of customers who were not in default on their contracts, failed to give customers refunds they were due, improperly seized customers’ personal property in repossessed vehicles and used global positioning system devices to locate and repossess vehicles without informing customers that the dealership had installed these devices.
“Intentionally targeting African-Americans for contracts with predatory terms because of their race violates fair lending laws,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “By filing this lawsuit, the Justice Department is acting to ensure that subprime dealers in the auto industry provide credit in accordance with the law. The Justice Department will continue to ensure that people have equal access to credit, regardless of race.”
