The Federal Trade Commission has accused three David McDavid car dealerships in North Texas and the company that owns them of charging their customers, particularly black and Latino customers, hidden fees for unwanted add-on items.

The FTC voted 5-0 to file an administrative complaint against Asbury Automotive and the dealers, the commission said. in a press release on Friday.

The commission alleged that misconduct occurred at three of David McDavid’s locations: the Ford location in Fort Worth, the Honda location in Frisco and the Honda location in Irving.

The car dealerships and their managing director Ali Benli are accused of using practices such as so-called “payment packing”. This involves customers unknowingly agreeing to higher monthly payments for their car than necessary and then adding additional clauses to the purchase contract to make up the difference.

According to company documents, one car dealership also showed that black customers were charged an average of $298 more than white customers for the same additional services, according to the FTC. Hispanic customers were charged an average of $214 more.

“The FTC will continue to crack down on illegal hidden fees and discrimination that have no place at auto dealerships,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a press release. “Like the Combatting Auto Retail Scams (CARS) rule, today’s action underscores our commitment to protecting consumers in the car-buying process and creating a fair playing field for honest dealers.”

The add-on products allegedly included chemical protective coatings and service contracts for life and disability insurance, according to complaints from consumers. Some said representatives never discussed these products during the sale, while others said they specifically said no to the products, which were later added without their consent.

According to the FTC, customers were not shown the full documents, just the places where they were asked to sign. Others were told the additional information was mandatory.

According to the press release, a full 75% of consumers reported being charged for additional services they did not agree to.

Benli did not respond to a request for comment. Frisco site David McDavid declined to comment and referred KERA News to Asbury’s email for inquiries about FTC information.

In a statement Friday, Asbury Automotive denied what it said were “false” and “unfounded” allegations of deceptive business practices and racial discrimination. Customers were provided with full information about the cost of the “protective products” and the impact on their car payments, the statement said.

Asbury wrote that dealers also need an independent salesperson to verify sales to ensure that protective products are being sold with the customer’s written consent. The automaker accused FTC officials of refusing to disclose the methods they used to arrive at the allegations against Asbury, despite Asbury’s requests for the information.

The FTC files administrative complaints when it has reason to believe the law is being violated and it is in the public interest to act. This begins a process in which the allegations are heard in a hearing before an administrative law judge.

The FTC has not set a date for the hearing. Asbury wrote that the company plans to contest the FTC’s complaint.

“We will not allow the FTC to fine us or impose burdensome requirements that would negatively impact our customers’ car buying experience, not apply to others, and would put us at a competitive disadvantage in the industry,” Asbury CEO David Hult said in the statement.

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