1

ALDEN F. ABBOTT

General Counsel

COLIN HECTOR (CA Bar No. 281795)

NIKHIL SINGHVI (DC Bar No.496357)

Email: chector@ftc.gov; nsinghvi@ftc.gov

FEDERAL TRADE COMMISSION

600 Pennsylvania Ave., NW, Mail Drop CC-10232

Washington, DC 20580

Telephone: (202) 326-3376 (Hector)

Facsimile: (202) 326-3768

Attorneys for Plaintiff

Federal Trade Commission

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

FEDERAL TRADE COMMISSION,

 Plaintiff,

 v.

TATE’S AUTO CENTER OF WINSLOW, INC., 

an Arizona Corporation; 

TATES AUTOMOTIVE, INC., an Arizona 

Corporation; 

TATE FORD-LINCOLN-MERCURY, INC., 

d/b/a Tate’s Auto Center, a Delaware 

corporation; 

TATE’S AUTO CENTER OF GALLUP, INC., a 

New Mexico Corporation;

Richard Berry, individually and as an officer of 

Tate’s Auto Center of Winslow, Inc., Tates 

Automotive, Inc., Tate Ford-Lincoln-Mercury, 

Inc., and Tate’s Auto Center of Gallup, Inc.;

 Defendants, and

Linda Tate,

Relief Defendant.

Case no. 

COMPLAINT FOR 

PRELIMINARY AND 

PERMANENT 

INJUNCTION AND 

OTHER EQUITABLE 

RELIEF

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 1 of 31
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Plaintiff, the Federal Trade Commission (“FTC”) for its Complaint 

alleges:

1. The FTC brings this action under Section 13(b) of the Federal Trade 

Commission Act (“FTC Act”), 15 U.S.C. § 53(b); the Truth in Lending Act 

(“TILA”), 15 U.S.C. §§ 1601-1666j, and its implementing Regulation Z, 12 C.F.R. 

Part 226; and the Consumer Leasing Act (“CLA”), 15 U.S.C. §§ 1667-1667f and 

its implementing Regulation M, 12 C.F.R. Part 213. Under these authorities, the 

FTC seeks preliminary and permanent injunctive relief, rescission or reformation 

of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten 

monies, and other equitable relief for Defendants’ acts or practices in violation of 

Section 5(a) of the FTC Act, TILA and its implementing Regulation Z, and CLA 

and its implementing Regulation M.

JURISDICTION AND VENUE

2. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 

1331, 1337(a), and 1345. 

3. Venue is proper in this District under 28 U.S.C. § 1391(b)(1), (b)(2), 

(c)(2), and (d), and 15 U.S.C. § 53(b).

PLAINTIFF

4. Plaintiff FTC is an independent agency of the United States 

Government created by statute. 15 U.S.C. §§ 41-58. The FTC enforces Section 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 2 of 31
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5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or 

practices in or affecting commerce. The FTC also enforces TILA, 15 U.S.C. §§ 

1601-1666j, which establishes, inter alia, disclosure and calculation requirements 

for consumer credit transactions and advertisements, and CLA, 15 U.S.C. §§ 1667-

1667f, which establishes, inter alia, disclosure and calculation requirements for 

consumer lease transactions and advertisements.

5. The FTC is authorized to initiate federal district court proceedings, by 

its own attorneys, to enjoin violations of the FTC Act, TILA, and CLA, and to 

secure such equitable relief as may be appropriate in each case, including 

rescission or reformation of contracts, restitution, the refund of monies paid, and 

the disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b) and 1607(c).

DEFENDANTS

6. TATE’S AUTO CENTER OF WINSLOW, INC., is an Arizona 

corporation, with a principal place of business at 2400 East Route 66, Winslow, 

AZ 86047. Tate’s Auto Center of Winslow transacts or has transacted business in 

this district. At all times material to this Complaint, acting alone or in concert with 

others, Tate’s Auto Center of Winslow has advertised, marketed, distributed, or 

offered vehicles to consumers for sale or lease.

7. TATES AUTOMOTIVE, INC., also d/b/a Tate’s Nissan Pontiac 

GMC Buick, is an Arizona corporation, that has conducted business at locations 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 3 of 31
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including 411 E. Deuce of Clubs, Show Low, AZ 85901. Tates Automotive

transacts or has transacted business in this district. At all times material to this 

Complaint, acting alone or in concert with others, Tates Automotive has 

advertised, marketed, distributed, or offered vehicles to consumers for sale or 

lease. 

8. TATE FORD-LINCOLN-MERCURY, INC., also d/b/a Tate’s Auto 

Center, is a Delaware corporation, with a principal place of business at 1001 

Navajo Blvd, Holbrook AZ 86025. Tate Ford-Lincoln-Mercury transacts or has 

transacted business in this district. At all times material to this Complaint, acting 

alone or in concert with others, Tate Ford-Lincoln-Mercury has advertised, 

marketed, distributed, or offered vehicles to consumers for sale or lease.

9. TATE’S AUTO CENTER OF GALLUP, INC., is a New Mexico 

corporation, with a principal place of business at 1200 West Jefferson Ave., 

Gallup, NM 87301. Tate’s Auto Center of Gallup transacts or has transacted 

business in this district. At all times material to this Complaint, acting alone or in 

concert with others, Tate’s Auto Center of Gallup has advertised, marketed, 

distributed, or offered vehicles to consumers for sale or lease.

10. Defendant Richard Berry (“Berry”) has held himself out as the 

Secretary and Treasurer of each of the Corporate Defendants. Berry has also held 

himself out as the Owner and Corporate General Manager of Tate’s Auto Group, a 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 4 of 31
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business name that refers collectively to the Corporate Defendants. Berry has 

participated in the day-to-day operation of each Corporate Defendant, including 

entering into service contracts and responding to inquiries from government 

agencies. At all times material to this Complaint, acting alone or in concert with 

others, Berry has formulated, directed, controlled, had the authority to control, or 

participated in the acts and practices of Tate’s Auto Center of Winslow, Inc., Tates 

Automotive, Inc., Tate Ford-Lincoln-Mercury, Inc., and Tate’s Auto Center of 

Gallup, Inc., including the acts and practices set forth in this Complaint. Defendant 

Berry resides in this district and, in connection with the matters alleged herein, 

transacts or has transacted business in this district and throughout the United 

States.

11. Relief Defendant Linda Tate is an individual who has received 

hundreds of thousands of dollars from Defendants. Tate has received funds that 

can be traced directly to Defendants’ unlawful acts or pactices alleged below, and

she has no legitimate claim to those funds.

COMMON ENTERPRISE

12. Tate’s Auto Center of Winslow, Tate’s Automotive, Tate FordLincoln-Mercury, and Tate’s Auto Center of Gallup (collectively “Tate’s Auto” or 

“Corporate Defendants”) have operated as a common enterprise while engaging in 

the deceptive, unfair, and unlawful acts and practices alleged below. Corporate 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 5 of 31
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Defendants have conducted the business practices described below through 

interrelated companies that have common ownership, officers, managers, business 

functions, employees, and office locations. Because Tate’s Auto has operated as a 

common enterprise, each of the Corporate Defendants is jointly and severally 

liable for the acts and practices alleged below. Defendant Berry has formulated, 

directed, controlled, had the authority to control, or participated in the acts and 

practices of the Corporate Defendants that constitute the common enterprise.

COMMERCE

13. At all times material to this Complaint, Defendants have maintained a 

substantial course of trade in or affecting commerce, as “commerce” is defined in 

Section 4 of the FTC Act, 15 U.S.C. § 44.

DEFENDANTS’ BUSINESS PRACTICES

14. Tate’s Auto is a collection of auto dealerships with locations in cities 

near the border of the Navajo Nation. Many of its customers are citizens of the 

Navajo Nation, which includes parts of New Mexico, Arizona, and Utah. Tate’s 

Auto has a customer service center on the Navajo Nation Reservation in Window 

Rock, Arizona, and Tate’s Auto frequently sponsors Navajo Nation events and 

runs radio and print ads in Navajo media sources, in an effort to attract customers. 

15. In numerous instances, Tate’s Auto has engaged in unlawful practices 

related to the sale, lease, and financing of automobiles. Specifically, Tate’s Auto 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 6 of 31
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has: (i) falsified consumers’ income on vehicle financing applications; (ii) falsified

consumers’ down payment information on consumers’ financing applications and 

contracts; and (iii) disseminated deceptive advertisements offering vehicles for 

sale, financing, and lease.

Background on Financing Process

16. Tate’s Auto, like other dealers, frequently offers financing to 

consumers who wish to purchase a vehicle. As part of this process, Tate’s Auto 

extends financing terms, including the amount financed, term, and annual 

percentage rate (APR), to consumers as part of the vehicle purchase process. The

terms are contained in a retail installment sales contract (“RISC”) and other 

finance documents that consumers execute, and Tate’s Auto typically seeks to 

assign the RISC to a third party—such as a bank, finance company or credit union 

(collectively, “financing company”). If no financing company agrees to an 

assignment based on the terms of the financing package, the purchase may not be 

finalized. 

17. In attempting to assign a financing contract, Tate’s Auto generally 

must submit a completed financing application and contract to the financing 

company. The financing application requires a statement disclosing the 

consumer’s monthly income and the down payment, and the financing contract 

requires a statement disclosing the consumer’s down payment. Financing 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 7 of 31
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companies use this information to determine whether to accept an assignment of 

the contract.

Deception and Unfairness in the Financing Process

Falsification on Financing Applications

18. Since at least 2014, in numerous instances, Tate’s Auto has falsified 

consumers’ monthly income and down payments on financing applications and 

financing contracts. 

19. During the vehicle sales process, Tate’s Auto representatives have 

told consumers that Tate’s Auto will help them apply for and obtain financing for a 

vehicle purchase. To do this, Tate’s Auto representatives have told consumers 

they must provide personal information—including name, address, and monthly

income—so that Tate’s Auto can complete a financing application and sales 

contract for the consumer. The representatives typically have obtained this 

information by asking consumers to provide it orally during in-person or telephone

conversations, or by asking consumers to enter handwritten information on a form 

that Tate’s Auto has provided. Tate’s Auto has represented that the requested 

information is necessary for the financing company to determine whether 

consumers qualify for vehicle financing. After consumers have provided the 

requested information, Tate’s Auto representatives have filled out financing 

applications and contracts for consumers. Tate’s Auto representatives have 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 8 of 31
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instructed consumers to sign the documents, and have then presented these 

documents to financing companies for financing approval or contract assignment. 

20. In numerous instances, instead of using the information that

consumers provided to complete the financial paperwork, Tate’s Auto has used

inflated numbers falsely representing that consumers have higher monthly 

incomes. 

21. In numerous instances, Tate’s Auto representatives also have falsely 

inflated the amount of the consumer’s cash down payment. 

22. Tate’s Auto engages in a variety of practices that prevent consumers 

from reviewing the income and down payment information. Tate’s Auto 

representatives have often rushed consumers through the process of reviewing and 

signing these forms, preventing consumers from noticing inaccuracies. In 

numerous instances, Tate’s Auto’s representatives fill out financing applications

and contracts over the telephone or in public locations such as grocery store 

parking lots or restaurants, or do not give consumers the income and down 

payment portion of the contract to review before signing. In numerous other 

instances, Tate’s Auto employees have altered documents after they have been 

signed. As a result of these practices, in many instances consumers have been 

unaware that their incomes or down payments were recorded incorrectly on 

financing applications and contracts. Additionally, in some instances, consumers 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 9 of 31
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have reported that they told Tate’s Auto the information on an application was 

incorrect, and that although Tate’s Auto assured them the information would be 

corrected, it was not. 

23. In some cases where consumers eventually noticed these inaccuracies 

after the transaction was complete, they have reported that Tate’s Auto inflated 

their monthly incomes by hundreds or thousands of dollars per month. For 

example, one consumer told Tate’s Auto that she had a fixed monthly income of 

about $1,200. Without her knowledge, however, a Tate’s Auto representative 

inflated her income to $5,200 on the financing documents. Other consumers have 

reported that Tate’s Auto similarly inflated their incomes, including by submitting 

applications with income that was double or more the consumers’ actual income. 

24. In some instances, consumers have noticed that Tate’s Auto inflated 

their income on financing applications and have refused to go through with the 

transaction.

25. Tate’s Auto also has misrepresented the amount of consumers’ down 

payments on financing applications and contracts. In numerous instances, after a 

consumer has agreed to make a down payment of a specific amount or told a Tate’s 

Auto representative that the consumer cannot put any money down, Tate’s Auto 

has inflated the down payment amount in the consumer’s paperwork. 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 10 of 31
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26. By falsifying consumers’ income and the amount of out-of-pocket 

cash paid by consumers, Tate’s Auto has inaccurately made consumers appear 

more creditworthy and has submitted false financing applications without 

consumers’ knowledge. In so doing, Tate’s Auto has made it appear as though 

consumers provided the false information, thereby exposing consumers to risk of 

liability for submitting false information to financing companies, and associated 

costs. 

27. Consumers could not reasonably avoid the harm from their increased 

risk of liability, because they did not know Tate’s Auto would falsify or had 

falsified the information on the credit applications Tate’s Auto submitted to 

financing companies.

28. Fraud reviews undertaken by third-party financing companies found 

high rates of falsified financing applications and contracts that were submitted by 

Tate’s Auto. 

29. In December 2015, a major financing company to which Tate’s Auto 

had been regularly assigning financing contracts, conducted fraud reviews of 

Tate’s Auto. During the fraud reviews, the financing company found that 

numerous financing agreements for Tate’s Auto dealerships were based on 

applications with inflated income: 

 Tate’s Auto Center of Winslow – 44.83% of applications listed 

inflated income

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 11 of 31
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 Tate’s Automotive d/b/a Tate’s Nissan Buick GMC – 38.71% of 

applications listed inflated income

 Tate’s Auto Center – 37.50% of applications listed inflated income

 Tate’s Auto Center of Gallup – 17.9% of applications listed inflated 

income

30. In numerous instances, the fraud reviews found that applications from 

Tate’s Auto contained monthly incomes that were inflated more than $2,000, and 

often more than double what the consumer actually made. In many cases, the 

financing company verified that the income was falsified with consumers who 

explained that the income information they had provided to Tate’s Auto was not 

accurately reflected in the application. For example, one consumer reported his

monthly income as $1,000 to Tate’s Auto, but the application contained a stated 

income of $4,896. Another consumer who was unemployed when she applied for 

financing—earning $100 to $200 from jewelry sales—reported that her application 

falsely claimed she had a monthly income of $3,889 from a business she did not 

work for. In yet another example, a consumer who was retired and lived on a fixed 

income reported that the application submitted by Tate’s Auto inflated her earnings

by more than $1,000 a month. 

31. Tate’s Auto’s falsification of information on credit applications 

resulted in financing companies accepting assignment of credit to consumers for 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 12 of 31
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which they did not qualify and on which they defaulted at a higher rate than 

properly qualified consumers.

32. The financing company ceased doing business with Tate’s Auto in 

January 2016 after experiencing substantial losses due to higher than average rates 

of default and repossession. At that time, it terminated its agreement to accept 

assignment of credit from Tate’s Auto, after it incurred “staggering” losses on 

credit originated by Tate’s Auto, ultimately restricting access to credit for many 

other consumers.

33. Another financing company to which Tate’s Auto regularly assigned 

financing also discovered in its audits that Tate’s Auto had inflated consumers’ 

incomes in many instances. In numerous instances, consumers themselves also 

reported that Tate’s Auto submitted falsified applications that inflated their 

monthly income by hundreds or thousands of dollars. 

34. Consistent with the fraud reviews, a 2014 Report by the Navajo 

Nation Human Rights Commission (“NNHRC”) entitled “Assessing Abuse of 

Navajo Consumers When Purchasing Vehicles in Border Towns” reported that the 

NNHRC received more complaints about Tate’s Auto than any other dealership.

35. Consumers in the market could not reasonably avoid the harm from 

decreased access to credit, as discussed in Paragraph 32, because they were not 

parties to the transactions where Tate’s falsified information.

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 13 of 31
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36. The harm caused by Tate’s Auto’s falsification of information on 

credit applications submitted to financing companies outweighed the benefits, if 

any, of this practice for consumers and competition. 

Deceptive Advertisements

37. Tate’s Auto has offered motor vehicles for sale or lease in numerous 

television, radio, online, and print advertisements. But in many instances, Tate’s 

Auto has misrepresented the nature of the offer or terms of financing or leasing.

Deceptive Monthly Payment Offer

38. Tate’s Auto has disseminated advertisements deceptively touting low 

payment amounts. For example, Tate’s Auto posted a video advertisement on the 

website YouTube.com that included the following screenshot offering a particular 

vehicle for “$169 a month.” The video was accompanied by a voice-over stating 

“. . . and now the Chrysler 200 can be in your driveway for only one sixty-nine per 

month.”

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 14 of 31
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While this video image is on screen, the prominent text stating “$169/MO” 

changes to “PURCHASE OR LEASE A 2015 CHRYSLER,” as follows. The 

video image is accompanied by a voice-over stating that if consumers “purchase or 

lease a new 2015 Chrysler 200” they will receive a new iPhone 6.

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 15 of 31
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39. In fact, consumers cannot purchase the vehicle for the advertised $169 

per month. This amount only applies to leases. 

40. Additionally, although the advertisement touts a low monthly 

payment amount, it does not clearly or conspicuously disclose that consumers must 

pay thousands of dollars in up-front payments to obtain the advertised monthly 

payment amount, and the number of scheduled payments. At the bottom of the 

screen, small white text displayed against a gray background states that consumers 

must also pay “$2899 due” at the lease signing, as well as the first month’s 

payment, tax, title, license and “doc” fees, and that 24 monthly payments are 

required. Additionally, the offer is only available with an unspecified “dealer 

contribution” that is not explained.

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 16 of 31
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Hidden Limitations on Discounts 

41. In numerous instances, Tate’s Auto has advertised vehicles for sale 

with specific discounts or “Incentive[s]” that purportedly reduce the 

manufacturer’s suggested retail price (“MSRP”). To obtain these discounts or 

incentives, however, consumers must meet certain conditions, which Tate’s Auto 

does not disclose adequately. For example, Tate’s Auto advertised a vehicle on its 

website with an “Incentive” discount of $5,250 from the MSRP, as follows. 

42. The face of the advertisement does not disclose that substantial 

conditions apply to consumers’ qualification for this $5,250 “Incentive.” 

Specifically, the “Incentive” discount is only available for consumers who trade in 

a 1995 or newer vehicle or terminate a non-Ford/Lincoln/Mercury lease 30 days 

prior to or 90 days after delivery. To learn of this restriction, a consumer would 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 17 of 31

2016 Ford Chassis Cab F-350 XL Commercial-truck 2-Valve so ... 

Engine: 6.2L 2-Valve SOHC EFI 

NA VS Engine 

Transmission: TorqShift 6-Speed 

SelectShift Automatic 

Transmissi 

Exterior Color: Oxford White 

Interior Color: Steel 

Stock#: T22340 

Vehicle Status: In Stock 

VIN: 1FD8W3G67GEC18989 

Manufacturer Offers 10: $750 and 0.0% on 

select Ford models, "Special" Ford Credit 

Retail Trade-In Assistance 

MSRP1 $41 ,155 

Incentive $5,250 

lnterrwt 

Price $35,905 

G11tePrlc11 

_;; aw Window Sticker 

( View Details ) 
18

have to first click on a link at the bottom of the advertisement that makes no 

reference to an “Incentive” or $5,250, and that is not otherwise clearly related to 

the claim. The link instead reads, “Manufacturer Offers10: $750 and 0.0% on select 

Ford Models, ‘Special’ Ford Credit Retail Trade-In Assisance.” If a consumer 

clicks on the second half of the link – the portion of text that reads “‘Special’ Ford 

Credit Retail Trade-In Assistance,” the consumer is sent to a pop-up box, allowing 

the consumer to “Request More Info” about “‘Special’ Ford Credit Retail Trade-In 

Assistance,” as depicted below. However, this pop-up box does not initially 

disclose the terms of the $5,250 “Incentive.” Only if the consumer next clicks on 

the link labeled “*Disclaimer(s)” does text expand, as depicted below, to reveal 

that the “Incentive” discount is only available for consumers who trade in a 1995 

or newer vehicle or terminate a non-Ford/Lincoln/Mercury lease 30 days prior to 

or 90 days after delivery. 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 18 of 31
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43. Footnote 10, which appears on the first screen after the link for 

“Manufacturer Offers” and on the second screen after the text stating 

“Manufacturer Offer,” contains general language stating that offers and incentives 

may not be available to all customers, and that to redeem an offer or incentive, a 

customer must purchase a vehicle by the stated expiration date. But it does not 

provide any information about incentives being limited to customers who trade-in a 

vehicle, terminate a lease, or fulfill a similar condition.

Undisclosed Financing Terms 

44. In many instances, Tate’s Auto has also distributed hardcopy flyers, 

such as the typical and illustrative example below, that prominently advertise 

vehicle offers with “$0 down” without disclosing any other required terms: 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 19 of 31

Request More Info 

Manufacturer Offer 10 

"Special" Ford Credit Retail Trade-In 

Assistance 

$5,250 cash back 

"Special" Ford Credit Retail Trade-In 

Assistance 

Offer only valid 1-04-2017 through 4-03-2017 

( 0.Vlewlnventory ) 

• 

----

Disclaimerlsl 

"Special" Ford Credit Retail Trade-In Assistance (Program #30216) recuires trade-in of 

1995 or newer vehicle or terminates a non-Ford/Lincoln/Mercury lease 30 days prior to 

or 90 days after delivery. Take new retail delivery from dealer stock by 04/03/2017. 

Recuires Ford Credit financing. Residenc y restrictions apply. See dealer for complete 

details. (See Trims) 

See State Disclaimer • 

Manufacturer Offer•• $750 cash back and 0.0% APR for 36 months on select Ford F350 Chassis models 

First Name • 

Last Name• 

Contact Me By• 

( Email v) 

Email• 

Home Phone• 

Postal Code• 

Comments 
20

45. Tate’s Auto also has published posts on its Facebook page and on 

publicly available Facebook group pages, such as the typical and illustrative 

examples below, that advertise vehicle offers with a stated monthly payment or 

low or zero down payment without disclosing certain other required terms: 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 20 of 31

TAT.'& 

AUTO GROUP 

Winslow, Az 

Free Tir et 4 L if w il:h Punhate of Bmnd Neu.r V hide 

* $0 Do,wn,. on OAC 

* FirJI: Jin ,e Buyus Pn:.igram 

* AU Mabes & Models 

Bang for Vour Buel: o" n:ide-ins 

•· New And Used Vehides 

£\ i t ,e r1um b e r on rn re, t eon1 in North. rn Arizona , pi OH~ ,g ,ve-

_H a~ II@ 

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21

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 21 of 31

Tate's Auto Group added 4 new photos 

August 26 at 12-52pm 

JUST ANNOUNCED!!!!! 

Brand New 2017 Nissan Titan Crew Cab 

$259 per mo plus tax 

$1. ,000 down payment 

Or 

$299 per mo plus tax 

Zero Down Payment 

www_shoptates_com 

928-537.4201 

' scar1ett Jam s 

r 

BRAND ~ PRE-OWNED VEHICLES! •• 

L APPRO S FOR L BRA' D EW '

' S.c:.i rl@tt. Jam@ s 

oecemller ~ r 2 16 

FREE DELIVERY SERVICEI 

p 

Brnn,dl N;ew & Pre-Ow edl Vi:!•h1l c1es! 201 6 & 2:0 11"S All ABSOLIU'lll:LY NO 

MONEY DOWN AT ALL On Approved C ,edi · 

686 683 838 

luba Crtv. l\Z (86045) 

co e down to Tat '5 In Winslow to Lal{ a loo I<. at Olilr N w 201 7 Arriiva s. 

we have Cars. rucits & SUvs! V!.tl •,·ork v..otlil Dodge • Chiysler. Jeep. 

Buie • incoln, GMCS. 1ss-an and Ford! Tates also o er or Free Tires or 

L -e Free De livery! So caill me ait 92 8-206--9166 to apply overrhe pjon@ or 

just to llave ques ·ons ans .,.ers Again I'm Searle Jay With a es in 

Winslow op 10 se you soon 
22

46. These vehicle offers for low or no down payment transactions fail to 

disclose required terms that are necessary for consumers to understand key terms 

of the advertised offer. 

VIOLATIONS OF THE FTC ACT 

47. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or 

deceptive acts or practices in or affecting commerce.”

48. Misrepresentations or deceptive omissions of material fact constitute 

deceptive acts or practices prohibited by Section 5(a) of the FTC Act. 

49. Acts or practices are unfair under Section 5 of the FTC Act if they 

cause substantial injury to consumers that consumers cannot reasonably avoid 

themselves and that is not outweighed by countervailing benefits to consumers or 

competition. 15 U.S.C. § 45(n). 

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 22 of 31

Corwin Ba e • Navaj0 Nation On ine Yard Sale 

ect?mber 5 2015 

APPLY TODA.VIII! WI NSL:OW TA TE' S AUTO, ,c:ENTER!JII ZERO, DOWNHII 

CALL ME OR TEXT E i (9:28)79,7-3044 

92 388 97b 

Ninsl 1 N (8 047) 

STILL TAKING APPUCATIONS AND IF YOU RECl61VED A ETTER I TI-lE 

MAIL WITH CAPITAL O E BANK ON IT GIVE M A CALL. .. 

(9 28 )797-30 4 ... 
23

Count I

Deceptive Falsification of Income or Down Payment

on Consumers’ Financing Documents

50. In numerous instances, in connection with the advertising, marketing, 

promotion, offering of financing, financing, offering for sale, or sale, of motor 

vehicles, Defendants have represented, directly or indirectly, expressly or by 

implication, that they would submit to financing companies the income 

information and down payment amount provided by consumers.

51. In fact, in numerous instances, through the means described in 

Paragraphs 19-22 of this Complaint, Defendants have not submitted to financing 

companies the income information and down payment amount provided by 

consumers. 

52. Therefore, Defendants’ representations as set forth in Paragraph 50 of 

this Complaint are false and misleading and constitute deceptive acts or practices 

in violation of Section 5(a) of the FTC Act, 15 U.S.C., 15 U.S.C. § 45(a).

Count II

Unfair Falsification of Income Information or Down Payment

on Consumers’ Financing Documents

53. In numerous instances, Defendants have falsified consumer income or 

down payment information on financing applications they submitted for consumers

to financing companies.

Case 3:18-cv-08176-DJH Document 1 Filed 07/31/18 Page 23 of 31
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54. Defendants’ actions cause or are likely to cause substantial injury to 

consumers that consumers cannot reasonably avoid themselves and that is not 

outweighed by countervailing benefits to consumers or competition.

55. Therefore, Defendants’ practices as described in Paragraph 53 above 

constitute unfair acts or practices in violation of Section 5 of the FTC Act, 15 

U.S.C. §§ 45(a) and (n).

Count III

Misrepresentations Regarding Advertised Transaction

56. In numerous instances, through the means described in Paragraphs 38

to 39, Defendants have represented, directly or indirectly, expressly or by 

implication, that consumers could finance the purchase of a 2015 Chrysler vehicle 

for monthly payments of $169.

57. In truth and in fact, in numerous instances in which Defendants have 

made the representations set forth in Paragraph 56 of this Complaint, consumers 

could not finance the purchase of the advertised vehicle for $169 a month. The 

prominently advertised monthly payment terms are components of lease offers and 

not credit offers.

58. Therefore, the making of the representations as set forth in Paragraph 

56 of this Complaint constitutes a deceptive act or practice in or affecting

commerce in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

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Count IV

Failure to Disclosure Material Aspects of Offers 

59. In numerous instances in connection with the advertising, marketing, 

promotion, offering for sale, or sale of a motor vehicle, Defendants have 

represented, directly or indirectly, expressly or by implication, that particular 

motor vehicles are available at a prominently advertised price or with a 

prominently advertised incentive or discount.

60. In numerous instances in which Defendants have made a 

representation set forth in Paragraph 59 of this Complaint, Defendants have failed 

to disclose adequately to consumers material conditions, limitations, and 

restrictions, including the need to trade-in a vehicle or terminate a lease. 

61. Defendants’ failure to disclose adequately the material information 

described in Paragraph 60, above, in light of the representation described in 

Paragraph 59, above, constitutes a deceptive act or practice in violation of Section 

5(a) of the FTC Act, 15 U.S.C. § 45(a).

VIOLATIONS OF THE TRUTH IN LENDING ACT AND REGULATION Z

62. Under Section 144 of the TILA and Section 226.24(d) of Regulation 

Z, as amended, advertisements promoting closed-end credit in consumer credit 

transactions are required to make certain disclosures (“TILA additional terms”) if 

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they state any of several terms, including the amount or percentage of any down 

payment (“TILA triggering terms”).

63. Defendants’ advertisements promote closed-end credit, and 

Defendants are subject to the requirements of the TILA and Regulation Z.

Count V

Failure to Disclose or Disclose Clearly and Conspicuously 

Required Credit Information

64. In numerous instances, Defendants’ advertisements promoting closedend credit have failed to disclose, or failed to disclose clearly and conspicuously, 

TILA additional terms required by the TILA and Regulation Z, including one or 

more of the following:

(a) The terms of repayment, which reflect the repayment 

obligations over the full term of the loan, including any balloon 

payment; and

(b) The “annual percentage rate,” using that term, and, if the rate 

may be increased after consummation, that fact.

65. Therefore, the practices as set forth in Paragraph 64 of this Complaint 

have violated Section 144 of the TILA, 15 U.S.C. § 1664, and Section 226.24(d) of 

Regulation Z, 12 C.F.R. § 226.24(d), as amended.

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VIOLATIONS OF THE CONSUMER LEASING ACT & REGULATION M

66. Under Section 184 of the CLA and Section 213.7 of Regulation M, 

advertisements promoting consumer leases are required to make certain disclosures 

(“CLA additional terms”) if they state any of several terms, such as the amount of 

any payment (“CLA triggering terms”). 15 U.S.C. § 1667c; 12 C.F.R. § 213.7.

67. Defendants’ advertisements promoting consumer leases are subject to 

the requirements of the CLA and Regulation M.

Count VI

Failure to Disclose or to Disclose Clearly and Conspicuously Required Lease 

Information

68. In numerous instances, Defendants’ advertisements promoting 

consumer leases have included CLA triggering terms, but have failed to disclose or 

to disclose clearly and conspicuously CLA additional terms required by the CLA 

and Regulation M, including one or more of the following:

(a) That the transaction advertised is a lease;

(b) The total amount due prior to or at consummation or by delivery, if 

delivery occurs after consummation;

(c) Whether or not a security deposit is required;

(d) The number, amount, and timing of scheduled payments; and

(e) With respect to a lease in which the liability of the consumer at the 

end of the lease term is based on the anticipated residual value of the 

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property, that an extra charge may be imposed at the end of the lease 

term.

69. Therefore, the practices as set forth in Paragraph 68 of this Complaint 

have violated Section 184 of the CLA, 15 U.S.C. § 1667c, and Section 213.7 of 

Regulation M, 12 C.F.R. § 213.7.

Count VII

Relief Defendant

70. Relief Defendant Linda Tate has received, directly or indirectly, funds 

or other assets from Defendants that are traceable to funds obtained from 

Defendants’ customers through the deceptive acts or practices described herein.

71. Relief Defendant Linda Tate is not a bona fide purchaser with legal 

and equitable title to Defendants’ customer’s funds or other assets, and she will be 

unjustly enriched if she is not required to disgorge the funds or the value of the 

benefit she received as a result of Defendants’ deceptive or unfair acts or practices.

72. By reason of the foregoing, Relief Defendant Tate holds funds and 

assets in constructive trust for the benefit of Defendants’ customers.

CONSUMER INJURY

73. Consumers have suffered and will continue to suffer substantial injury 

as a result of Defendants’ violations of the FTC Act, TILA, Regulation Z, the 

CLA, and Regulation M. In addition, Defendants have been unjustly enriched as a 

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result of their unlawful acts or practices. Absent injunctive relief by this Court, 

Defendants are likely to continue to injure consumers, reap unjust enrichment, and 

harm the public interest. 

THIS COURT’S POWER TO GRANT RELIEF

74. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court 

to grant injunctive and such other relief as the Court may deem appropriate to halt 

and redress violations of any provision of law enforced by the FTC. The Court, in 

the exercise of its equitable jurisdiction, may award ancillary relief, including 

rescission or reformation of contracts, restitution, the refund of monies paid, and 

the disgorgement of ill-gotten monies, to prevent and remedy any violation of any 

provision of law enforced by the FTC.

PRAYER FOR RELIEF

Wherefore, Plaintiff Federal Trade Commission, pursuant to Section 13(b) 

of the FTC Act, 15 U.S.C. § 53(b), TILA and its implementing Regulation Z, 12 

C.F.R. Part 226, CLA and its implementing Regulation M, 12 C.F.R. Part 213, and 

the Court’s own equitable powers, requests that the Court:

A. Award Plaintiff such preliminary injunctive and ancillary relief as 

may be necessary to avert the likelihood of consumer injury during the pendency 

of this action, and to preserve the possibility of effective final relief, including but 

not limited to a temporary and preliminary injunction;

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B. Enter a permanent injunction to prevent future violations of the FTC 

Act, TILA, Regulation Z, the CLA, and Regulation M by Defendants; 

C. Award such relief as the Court finds necessary to redress injury to 

consumers resulting from Defendants’ violations of the FTC Act, TILA, 

Regulation Z, the CLA, and Regulation M, including but not limited to, rescission 

or reformation of contracts, restitution, the refund of monies paid, and the 

disgorgement of ill-gotten monies; and

D. Enter an order requiring Relief Defendant to disgorge all funds and 

assets, or the value of the benefit it received from the funds and assets, which are 

traceable to Defendants’ deceptive acts or practices; and

E. Award Plaintiff the costs of bringing this action, as well as such other 

and additional relief as the Court may determine to be just and proper.

Dated: July 31, 2018 Respectfully submitted,

ALDEN F. ABBOTT

General Counsel

/s/ Colin Hector

COLIN HECTOR

NIKHIL SINGHVI

Email: chector@ftc.gov; nsinghvi@ftc.gov

FEDERAL TRADE COMMISSION

600 Pennsylvania Ave., NW

Mail Drop CC-10232

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Washington, DC 20580

Telephone: (202) 326-3376 (Hector)

Facsimile: (202) 326-3768

Attorneys for Plaintiff

FEDERAL TRADE COMMISSION

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