Hefty Fines and Settlements from F&I Disclosure Violations

$2,600,000 per enforcement action on average, plus incremental outside counsel fees ($150,000–$400,000 per case), restitution and chargebacks on improperly sold F&I products ($250–$1,000 per affected deal, which can total hundreds of thousands), and lost gross from unwound or re‑written contracts. Shadow‑IT recordkeeping failures at the title stage make it difficult or impossible to prove that F&I products were optional and properly disclosed, turning otherwise defensible deals into multimillion‑dollar settlements. • $2,600,000 per FTC settlement for undisclosed F&I products; additional state AG fines up to $50,000 per violation under CARS Rule • $2,600,000 per FTC settlement; additional exposure under Fair Credit Reporting Act (FCRA) if discriminatory pricing applied to subprime segment; reputational damage from consent violations

Bundled pricing on purchase order (products not itemized); verbal mention of warranty without written menu; reliance on customer signature on general finance agreement without separate product consent; no evidence of 'express informed consent' per CARS Rule definition • Deal jacket printed and filed manually; OFAC compliance tracked via shared Excel checklist updated weekly; no automated 10-year record retention flag (new March 2025 requirement) • Email chains between Inventory Manager and F&I Manager, manual Excel spreadsheets tracking which buyers received which disclosures, paper-based deal jackets with unsigned or undated disclosure forms