“The Complaint charges that Defendants participated in deceptive and unfair acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and in acts and practices in violation of TILA, 15 U.S.C. §§ 1601-1666J, and its implementing Regulation Z, 12 C.F.R. Part 226, and the CLA, 15 U.S.C. §§ 1667-1667f, and its implementing Regulation M, 12 C.F.R. Part 213, in the advertising, sales, and financing of new and used motor vehicles.”

💡 This establishes the legal foundation for multiple violations spanning deceptive practices, lending law, and leasing regulations.

“Tate’s Auto Center served consumers living near or on the Navajo Nation, an area where economic opportunities are often scarcer, and consumer advocacy resources may be more limited. In short, a particularly vulnerable demographic became susceptible to this alleged misconduct.”

💡 The dealership deliberately operated in an area with limited consumer protections and economic vulnerability.

“The complaint cites a Navajo Nation Human Rights Commission report claiming Tate’s Auto Center garnered the most consumer complaints compared to other dealerships in the area.”

💡 Local authorities had identified the problem pattern, yet enforcement took years to materialize.

“Financing companies conducted audits, referred to in the complaint as fraud reviews, revealing that significant percentages of the applications submitted by Tate’s Auto included inflated incomes. On one of these reviews, over 40% of the dealership’s financing applications had substantially higher incomes than consumers had reported in person.”

💡 Independent financial audits documented the scope and systematic nature of the income falsification scheme.

“Individual Defendant, Individual Defendant’s officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the sale or leasing of Motor Vehicles or the extension of consumer credit, are permanently restrained and enjoined from: Altering or failing to truthfully record the information provided by consumers on applications, deal papers, or any other documents associated with consumers’ purchase, financing, or leasing of a Motor Vehicle.”

💡 The court order explicitly prohibits the exact practices the dealership allegedly engaged in systematically.

“Failing to provide consumers with: all applications, deal papers, and other documents associated with consumers’ purchase, financing, or leasing of a Motor Vehicle, and a reasonable opportunity and sufficient time to review and verify them prior to Individual Defendant submitting the application and prior to consummation of the transaction; and a copy of all final signed documents before consumers take possession of the vehicle.”

💡 Consumers were denied the ability to review and verify documents before submission, enabling the falsification scheme.

“Federated Mutual Insurance Company has deposited FOUR HUNDRED AND FIFTY THOUSAND DOLLARS ($450,000) by electronic funds transfer to the Commission, in accordance with the instructions provided by a representative of the Commission. Individual Defendant further concedes that he never held a right to payment of the funds transferred by Federated Mutual Insurance Company to the Commission.”

💡 The settlement was funded by insurance, not personal assets, potentially shielding the defendant’s wealth.

“Individual Defendant neither admits nor denies any of the allegations in the Complaint, except as specifically stated in this Order. Only for purposes of this action, Individual Defendant admits the facts necessary to establish jurisdiction.”

💡 The settlement allows the defendant to avoid admitting fault while still ending the legal action.

“Submitting documentation regarding consumers’ purchase, financing or leasing of a Motor Vehicle if Individual Defendant knows or has reason to believe that any information on such documentation is false or misleading.”

💡 The order’s prohibition language indicates the defendant submitted documents knowing they contained false information.

“Individual Defendant, Individual Defendant’s officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the advertising, marketing, offering for sale or lease, sale or lease, or servicing of Motor Vehicles, are permanently restrained and enjoined from: Making any misrepresentation, expressly or by implication.”

💡 The injunction is permanent and broadly covers all future business activities involving motor vehicles.

“If a representative of the Commission decides that direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, the Commission may apply any remaining money for such other relief (including consumer information remedies) as it determines to be reasonably related to Defendants’ practices alleged in the Complaint.”

💡 Harmed consumers may not receive direct compensation if the FTC determines it is impracticable.

“On September 23, 2020, Individual Defendant Richard K. Berry, and his wife, Amy E. Berry, filed a joint petition for relief under Chapter 7 of the U.S. Bankruptcy Code. In re Richard K. & Amy E. Berry, No. 2:20-bk-10757-DPC (Bankr. D. Az.) (Berry Bankruptcy Case).”

💡 The defendant filed for bankruptcy protection while the FTC case was ongoing, potentially limiting personal financial liability.

“Within 14 days of receipt of a written request from a representative of the Commission, Individual Defendant must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury; appear for depositions; and produce documents for inspection and copying.”

💡 The order requires ongoing monitoring and reporting but imposes no criminal penalties or immediate jail time.

“Failing to conduct reasonable ongoing procedures to ensure that information provided by consumers on applications, deal papers, or any other documents associated with consumers’ purchase, financing, or leasing of a Motor Vehicle is not altered, including by providing periodic training to all of Individual Defendant’s employees and agents with any responsibility for vehicle sales, financing, or leasing, and conducting periodic audits.”

💡 The dealership had no internal controls to prevent falsification, suggesting institutional acceptance of the practice.

“Stating, expressly or by implication: The amount or percentage of any down payment, the number of payments or period of repayment, the amount of any payment, or the amount of any finance charge, without disclosing Clearly and Conspicuously all of the following terms: The amount or percentage of the down payment; The terms of repayment; and The annual percentage rate, using the term annual percentage rate or the abbreviation APR.”

💡 The dealership violated federal lending disclosure laws by advertising payment terms without required APR disclosures.