Cynthia Jackson came to me a year ago with a complaint about how she was treated by Tricolor, a huge used car business based in Dallas. Warning signs were everywhere.
We had no way of knowing that Tricolor was about to crash into bankruptcy, come under investigation for fraud and abandon an estimated 11,000 cars on its nearly 60 car lots in several states.
We had no way of knowing that Tricolor (pronounced tree-calore) was about to become a symbol of the weakness of the subprime auto industry.
Cynthia Jackson says a used car she bought from Tricolor Auto caused no end of problems. for herself. Now Tricolor has filed bankruptcy and closed.
Courtesy of Cynthia Jackson
Watchdog Alert
Buy-here, pay-here
The company was launched with high hopes. The three colors are from the Mexican flag. Target customers were Hispanic adults, many without a driver’s license, credit score or even Social Security number.
The “buy-here, pay-here” lot charged high interest rates, didn’t stand behind its vehicles’ conditions and demanded biweekly payments. Clients who missed enough payments saw the car taken back and resold to someone else.
No help on repairs
Jackson’s problems began when the water pump on her Ford Explorer broke. She, not Tricolor, had to pay for it. She rented a car to get to work, but it was too expensive. Without her car, she couldn’t go to work. She lost her job. The car was repossessed.
‘Predatory’
Founder and CEO Daniel Chu told me in a 2024 interview that he knew his industry “has a very bad reputation … predatory. Taking advantage of people.”
He told me he counters that: “We try very hard to build a reputation that provides value to the customer and treats the customer with enormous respect.”
Chu added, “We’re the good guys.”
The company’s lawyer, Andrew DeLuca, told me in 2024 he offered Jackson a refund, but it came with a nondisclosure agreement that, among other requirements, demanded she retract comments she made in interviews with The Watchdog. She refused to sign, she said.
Cockroaches
One of the biggest lenders was JPMorgan Chase. CEO Jamie Dimon said his company investigated its involvement in “the cold light” and didn’t like what it found.
“Not our finest moment,” he said.
“I shouldn’t say this,” he told financial analysts in a phone call. “But when you see one cockroach, there’s probably more. Everyone should be forewarned.”
JPMorgan CEO Jamie Dimon had harsh words about Tricolor. He compared company leaders to cockroaches.
Richard Drew / AP
File complaints
Jackson and her husband, Kevin Kiepe, realized that something was rotten at the company. They complained to the governor’s office, the attorney general, the Better Business Bureau, any agency they could think of.
They also alerted journalists. (The Watchdog was the only one who covered their case.)
Two titles, one car
The bankruptcy filing showed the company had more than a billion dollars in assets and $1 billion in liabilities, plus 25,000 creditors. One of them, JPMorgan, reported a $170 million charge.
Although the company is shuttered, car loan payments are still expected.
The company website states, “We are no longer offering financing or sales service. If you are an existing customer please continue making your payments.”
The Texas Department of Motor Vehicles is investigating complaints about Tricolor, spokesperson Adam Shaivitz said.
The Dallas Morning News and other media outlets have reported that the U.S. Department of Justice is investigating Tricolor for fraudulent activity. Some vehicles had two titles on them, something not permitted because it misleads lenders.
In the car business, that’s called double flooring or double pledging. Almost 30,000 Tricolor car owners are driving vehicles with two titles — but they don’t know it.
Jackson told me “every door I tried to open to get justice was slammed in my face.”
When the bankruptcy was announced, she said, “it stopped me cold.”
“The financial impact has been devastating. I am still out $26,000. I ended up homeless in Dallas because I had no car, no income. What I went through felt like fraud from the beginning.”
Her husband said, “The warning bells were ringing, but nobody paid attention.”
Until now, when it’s too late.
Tricolor also operated under the names of Ganas and Ganas Ya.
In the Know
Buyers experiencing issues with a Texas dealer may file a complaint with the department of motor vehicles at www.TxDMV.gov/complaints.
For concerns related to dealer financing, buyers may file a complaint with the Office of Consumer Credit Commissioner, the state agency responsible for regulating motor vehicle financing.
Source: Texas DMV