FTC Cracks Down On Deceptive Car Ads: Buyer Beware Goes For Online, Too

Mar 29 2014, 3:02pm CDT | by

FTC Cracks Down On Deceptive Car Ads: Buyer Beware Goes For Online, Too
Photo Credit: Forbes Auto

The Federal Trade Commission is clamping down this year on misleading auto dealership advertising, in a series of cases the FTC named Operation Steer Clear.

Since January, the FTC has disclosed settlements with 10 dealerships in seven states. The latest example was last week, involving Courtesy Auto Group in Attleboro, Mass. According to the FTC, the group advertised “$0 down payment” without adequately disclosing other fees.

In a consent order, Courtesy Auto Group in effect agrees to obey the rules. That includes “clearly and conspicuously” disclosing, for instance, whether an advertised price is for a loan or a lease, and how much money is due at inception.

In another case, the FTC said Paramount Kia, Hickory, N.C., prominently advertised a $99 monthly payment, without disclosing prominently enough that the $99 payment was only for the first three months. After that, the monthly payment went up to $531.

The fine print is there, but it’s hard to read. However, there’s no missing the “$99/mo.” payment.

Other dealerships included in the FTC crackdown were in California, Georgia, Illinois, Michigan and Texas.

“Dealers’ ads need to spell out costs and other important terms customers can count on,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a written statement when the cases were first announced, earlier this year. “If they don’t, dealers can count on the FTC to take action.”

There’s nothing new in the FTC’s advice of “buyer beware.” What’s new is that the FTC is now taking greater pains to examine advertising that’s posted online or on social media.

In some cases, according to the FTC, dealerships increased their chances of getting in trouble by taking ads that might have been OK in print or on TV and simply cutting and pasting them online.

Fine print that was at least plausibly legible in a newspaper ad or on TV became unreadable when it was reproduced in much tinier print online, or in a YouTube video.

Source: Forbes Auto

 
 

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