Two Fiat Chrysler dealerships are filing a civil racketeering suit against the automaker, alleging that FCA offered dealers money to report unsold vehicles as sold. The federal suit was filed earlier today in Chicago, saying that FCA conspired with certain dealerships to inflate its monthly U.S. sales reports.
Since recovering from its bankruptcy, FCA has reported 69 consecutive monthly year-over-year gains, which could now be called into question. The lawsuit alleges that dealerships were offered money to falsely report sales on the last day of the sales month, then “back out” those sales the following business day before the factory warranty on the vehicles could be processed and ran.
The suit also alleges that FCA officials were aware of the false reporting of sales and even rewarded local managers for hitting sales targets, even if they were false.
One example being cited in the lawsuit says that one of the automaker’s business center managers offered Edward Napleton from the Napleton Automotive Group, which is one of the dealerships filing the lawsuit, $20,000 “to falsely report the sales of 40 new vehicles” at the end of an unspecified month. Napleton adds in the lawsuit that the offer was made after a subordinate had falsely reported the sale of 16 new vehicles without Napleton’s knowledge. Although the 40-vehicle offer was rejected by Napleton, the offer exposed the earlier 16-vehicle inflation deal.
The $20,000 payment would have been disguised “as a co-op advertising credit to the dealer’s account” to not trigger a sales audit and exposing the practice.
FCA declined to comment as it has not been served the lawsuit yet.
[Source: Automotive News]
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