Wisconsin car dealer agrees to pay refunds after being accused of discriminating against Native Americans

A northern Wisconsin car dealership has agreed to pay $1.1 million in refunds to Native American customers it allegedly scammed, according to a statement this week by the Wisconsin Department of Justice.

The current and former owners of Rhinelander Auto Group in Rhinelander and its general manager, Daniel Towne, agreed to the court-ordered settlement after an investigation by the DOJ and Federal Trade Commission agents showed multiple improprieties.

“Working closely with the State of Wisconsin, we are holding these dealerships accountable for discriminating against American Indian customers and sneaking junk fees onto consumers’ bills,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “A vehicle is one of the most expensive purchases families make, and we are fully committed to ensuring that all consumers navigating the car-buying process can do so without facing unlawful discrimination or paying for products and services they do not want.”

Rhinelander Auto Group issued a statement saying it settled to avoid a court battle and that it did nothing wrong.

"... We reluctantly agreed to a voluntary resolution to conclude the matter," the statement read in part. "The agreement includes no admission of wrong-doing, and it requires the company to pay a forfeiture; upgrade its compliance, credit, and other administrative policies; and expand its employee training efforts."

Rhinelander is located about 25 miles from Forest County Potawatomi Community tribal lands and is in the region of the Lac du Flambeau and Mole Lake Ojibwe reservations.

In a lawsuit against the car dealership, the FTC and DOJ state their investigation shows the dealer charged an average of $1,362 more for add-ons in credit transactions for Native Americans than non-Latino white customers since 2016.

For example, one customer was told she was required to purchase Guaranteed Asset Protection for more than $1,000, even though she didn’t want to and it's not required.

When the dealership changed owners in 2019, the practice continued, according to the lawsuit, and the unlawful junk fees even increased a little on average.

In addition, Native Americans were charged $401 or more in additional markup costs compared to non-Latino white customers, according to the lawsuit.

Rhinelander Auto Group denies it targeted Native Americans and that it deceptively charged add-ons.

"We totally reject that our people — many of whom are long-term members of the local community — would engage in the practices alleged," the dealer's statement read. "That’s not who we are, and there is a great deal of evidence to reinforce the fact that Rhinelander Auto Group and its employees are ethical, decent, and very good people."

The proposed settlement also requires the dealership to stop deceiving customers about whether add-ons are required for a purchase.

“Rhinelander Auto Group is glad to put this matter behind us and focus on serving our customers," the dealer's statement read. "We have been a part of the Rhinelander area for nearly 20 years, and we take pride in doing things the right way and treating everyone fairly. Our commitment is to continue on that path going forward.”

Frank Vaisvilas is a former Report for America corps member who covers Native American issues in Wisconsin based at the Milwaukee Journal Sentinel. Contact him at fvaisvilas@gannett.com or 815-260-2262. Follow him on Twitter at @vaisvilas_frank.

This article originally appeared on Milwaukee Journal Sentinel: Wisconsin car dealer to pay after scam of Native Americans alleged