FCA US Phantom Freight Charges on New Vehicles Class Action

This class action concerns “phantom freight,” an inflation of the charge for transporting vehicles from their manufacturer to dealers. This was originally a problem in the 1950s, until Congress took steps to end it. But this complaint alleges that FCA US, LLC and its parent company Stellantis, NV are doing it again by inflating the “destination charges” for Chrysler, Jeep, Dodge, Ram, Fiat, and Maserati vehicles.

Fourteen classes have been proposed for this action, including state classes for Florida, Georgia, Illinois, Iowa, Missouri, Ohio, Pennsylvania, and Texas; additional classes have been proposed for certain states’ consumer protection laws. For example, there is a Georgia Class, for persons and entities who bought a new class vehicle in Georgia, and a Georgia’s Fair Business Practices Act Class for those who bought a new class vehicle in Georgia for personal, household, or family purposes.

In the 1950s, the complaint alleges, car dealers were charging consumers phantom freight charges that they never actually incurred. Congress originally solved the problem with the institution of the Monroney sticker, which required the itemization of things like accessories and the destination charge. For a time, it appeared to solve the problem of phantom freight charges.

Now, the complaint alleges, “So-called ‘destination charges’ on FCA vehicles have skyrocketed in recent years in a manner untethered to any actual costs incurred.” It quotes a 2021 article in in Consumer Reports as saying, “Destination fees rose an average of 90 percent on Chrysler, Dodge and Jeep vehicles; 74 percent on Ram trucks since 2011; and 114% of Fiats since 2012.”

The complaint contends, “FCA’s destination charges … are substantially higher than the true cost of delivering the vehicles to dealerships for sale.”

The complaint draws examples from the experience of its plaintiffs. For example, plaintiffs Perry and Wendy Beeney bought a new 2020 Dodge Journey in 2021 and a 2021 Jeep Trailhawk in 2021, and the complaint alleges that for each of these vehicles, the Monroney sticker showed a destination charge of $1,495. They also bought a 2022 Ran 2500 Power Wagon in 2021, and the complaint alleges that the Monroney sticker for it showed a destination charge of $1,795.

The complaint alleges that so-called drip pricing or partitioned pricing have allowed dealers to sneak in other costs the consumer hadn’t originally reckoned on. Consumers may originally be quoted the manufacturer’s suggested retail price (MSRP), the complaint claims, which does not include things like the destination charge, and only find out later how much they will really be paying for the vehicle.

The complaint alleges that manufacturers are now finding destination charges a good place to practice “price packing.” It shows charts, such as the increases in this charge for various makes of vehicle and the much more modest increases in the IRS Mileage Reimbursement Rate, which has ranged from 54 cents per mile in 2016 to 58.5 in 2022, and which actually fell in 2021.

Article Type: Lawsuit
Topic: Consumer
Tags: Excessive Fee Increases, Money Had and Received, Unjust Enrichment