Asbury Automotive Group (NYSE: ABG) today rejected false and
unfounded allegations by the Federal Trade Commission (FTC) that
three of its dealerships in the Dallas-Ft. Worth area sold
protection products to customers that the customers did not agree
to buy and that the dealerships discriminated against minorities in
the sale of these products.
After carefully reviewing the dealerships’ records, Asbury said
it will contest the FTC’s lawsuit alleging violations related to
the sale of what the FTC calls “add-on” products and will defend
the dealerships’ sales practices.
The dealerships – David McDavid Ford of Ft. Worth and David
McDavid Honda of Frisco and of Irving – conducted a thorough
internal review. Consistent with company policy, customers who
purchased protection products received full disclosure about the
products’ costs, impact on payments, and other important terms.
Customers signed for the protection products, which were itemized
separately on paperwork provided to the customers.
Prior to finalizing sales, the dealerships take the additional,
extraordinary step of requiring a compliance review by an
independent deal clerk to ensure that protection products are sold
with the buyer’s signed consent. The dealerships’ policies and
training forbid the sale of protection products such as service
contracts, maintenance plans, and interior-exterior protection
without explicit, written approval from customers. If Asbury team
members are found to have engaged in the sort of conduct alleged by
the FTC, they are subject to disciplinary action, including
termination.
FTC officials refused to provide the methodology they employed
in making their allegations even though Asbury requested such
information for several months. Asbury has verified through a
Freedom of Information Act request that the FTC received no
consumer complaints about the McDavid dealerships from 2019, the
start of the period covered by the lawsuit, through late spring of
this year.
“Asbury Automotive takes great pride in its compliance
procedures and training practices, and firmly believes that we
protect our guests and serve them well,” said David W. Hult,
Asbury’s CEO. “We offer popular and reliable products that protect
our guests and their families including roadside assistance for
stranded motorists, coverage for maintenance and unexpected
repairs, and protection from interior and exterior damage.”
Dan Clara, Senior Vice President of Operations, rejected the
FTC’s assertion that minority customers were charged more for
protection products than other customers. “Asbury is committed to
non-discrimination and has implemented policies, training, and
monitoring to ensure that our dealerships comply with standards on
fair lending and equal credit opportunity,” Clara said. “I am proud
that Asbury is one of the few companies in the industry that has a
Chief Diversity, Equity, and Inclusion Officer. In addition, the
three dealerships in question are highly diverse, from the highest
level of leadership to front-line staff workers, and in that way
reflect the demographics of the guests they serve.”
Asbury CEO David Hult added, “We will not allow the FTC to
coerce fines from us or subject us to onerous requirements that
negatively impact the car-buying experience for our customers,
would not apply to others, and would place us at a competitive
disadvantage in the industry. We are confident that we will prevail
in the litigation.”
For inquiries and information, visit
https://investors.asburyauto.com/ftc.
About Asbury Automotive Group,
Inc.
Asbury Automotive Group, Inc. (NYSE: ABG), a Fortune 500 company
headquartered in Duluth, GA, is one of the largest automotive
retailers in the U.S. In late 2020, Asbury embarked on a multi-year
plan to increase revenue and profitability strategically through
organic operations, acquisitive growth and innovative technologies,
with its guest-centric approach as Asbury’s constant North Star. As
of June 30, 2024, Asbury operated 204 new vehicle dealerships (155
dealership operations), representing 31 brands of automobiles and
37 collision centers in 15 states. Asbury also operates Total Care
Auto, Powered by Landcar, a leading provider of service contracts
and other vehicle protection products. Asbury offers an extensive
range of automotive products and services, including new and used
vehicles; parts and service, which includes vehicle repair and
maintenance services, replacement parts and collision repair
services; and finance and insurance products, including arranging
vehicle financing through third parties and aftermarket products,
such as extended service contracts, guaranteed asset protection
debt cancellation, and prepaid maintenance. Asbury ranks 18th in
the 2023 Forbes list of America’s Best Mid-Sized Companies. Asbury
is recognized as one of America’s Greatest Workplaces 2023 by
Newsweek as well as one of the Best Companies to Work For in the
Retailers industry by U.S. News & World Report.
For additional information, visit www.asburyauto.com.
Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are statements other than
historical fact, and may include statements relating to goals,
plans, objectives, beliefs, expectations and assumptions with
respect to the lawsuit filed by the FTC, Asbury’s intentions with
respect to challenging such lawsuit and the potential impact of
such lawsuit, projections regarding Asbury's financial position,
liquidity, results of operations, cash flows, leverage, market
position, the timing and amount of any stock repurchases, and
dealership portfolio, revenue enhancement strategies, operational
improvements, projections regarding the expected benefits of
Clicklane, management’s plans, projections and objectives for
future operations, scale and performance, integration plans and
expected synergies from acquisitions, capital allocation strategy,
business strategy. These statements are based on management's
current expectations and beliefs and involve significant risks and
uncertainties that may cause results to differ materially from
those set forth in the statements. These risks and uncertainties
include, among other things, adverse outcomes with respect to
current and future litigation and other proceedings, including,
without limitation, the FTC lawsuit, our inability to realize the
benefits expected from recently completed transactions; our
inability to promptly and effectively integrate completed
transactions and the diversion of management’s attention from
ongoing business and regular business responsibilities; our
inability to complete future acquisitions or divestitures and the
risks resulting therefrom; any supply chain disruptions impacting
our industry and business, market factors, Asbury's relationships
with, and the financial and operational stability of, vehicle
manufacturers and other suppliers, acts of God, acts of war or
other incidents and the shortage of semiconductor chips and other
components, which may adversely impact supply from vehicle
manufacturers and/or present retail sales challenges; risks
associated with Asbury's indebtedness and our ability to comply
with applicable covenants in our various financing agreements, or
to obtain waivers of these covenants as necessary; risks related to
competition in the automotive retail and service industries,
general economic conditions both nationally and locally,
governmental regulations, legislation, including changes in
automotive state franchise laws, and Asbury's ability to execute
its strategic and operational strategies and initiatives, including
its five-year strategic plan, Asbury's ability to leverage gains
from its dealership portfolio, Asbury's ability to capitalize on
opportunities to repurchase its debt and equity securities or
purchase properties that it currently leases, and Asbury's ability
to stay within its targeted range for capital expenditures. There
can be no guarantees that Asbury's plans for future operations will
be successfully implemented or that they will prove to be
commercially successful.
These and other risk factors that could cause actual results to
differ materially from those expressed or implied in our
forward-looking statements are and will be discussed in Asbury's
filings with the U.S. Securities and Exchange Commission from time
to time, including its most recent annual report on Form 10-K and
any subsequently filed quarterly reports on Form 10-Q. These
forward-looking statements and such risks, uncertainties and other
factors speak only as of the date of this press release. We
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20240816075350/en/
Investors & Reporters May Contact: Joe Sorice
Manager, Investor Relations (770) 418-8211 ir@asburyauto.com
Asbury Automotive (NYSE:ABG)
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