![]() 03/31/2014 at 13:19 • Filed to: stealerships, ad watch, car-buying, FTC | ![]() | ![]() |
The Federal Trade Commission has been cracking down on dealerships using deceptive advertising. !!!error: Indecipherable SUB-paragraph formatting!!!
"Buying or leasing a car is a big deal, and car ads are an important source of information for serious shoppers," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "Dealers' ads need to spell out costs and other important terms customers can count on. If they don't, dealers can count on the FTC to take action."
Here are some highlights of the report-
California
!!!error: Indecipherable SUB-paragraph formatting!!! of La Puente, Calif., and !!!error: Indecipherable SUB-paragraph formatting!!! , of South Gate, Calif., allegedly violated the FTC Act by deceptively advertising that consumers could purchase vehicles at specific low prices when, in fact, the price was $5,000 higher. Both dealers' ads involved a mix of English and Spanish. !!!error: Indecipherable SUB-paragraph formatting!!! , Los Angeles, and !!!error: Indecipherable SUB-paragraph formatting!!! of Cerritos, Calif., violated the FTC Act by deceptively advertising that consumers could pay $0 up-front to lease a vehicle when, in fact, the advertised amounts excluded substantial fees and other amounts. The ads also allegedly violated the Consumer Leasing Act (CLA) and Regulation M, by failing to disclose certain lease related terms. Norm Reeves Honda's ads also allegedly violated the Truth in Lending Act (TILA) and Regulation Z, by failing to disclose certain credit related terms.
Georgia
!!!error: Indecipherable SUB-paragraph formatting!!! of Morrow, Ga., allegedly violated the FTC Act by deceptively advertising that consumers could finance a vehicle purchase with low monthly payments when, in fact, the payments were temporary "teasers" after which consumers would owe a different amount. The ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.
Illinois
!!!error: Indecipherable SUB-paragraph formatting!!! of Clarendon Hills, Ill., allegedly violated the FTC Act by deceptively advertising that consumers could pay $0 up-front to lease a vehicle when, in fact, the advertised amounts excluded substantial fees and other amounts. The ads also allegedly violated the CLA and Regulation M, by failing to disclose certain lease related terms.
North Carolina
!!!error: Indecipherable SUB-paragraph formatting!!! , N.C., allegedly violated the FTC Act by deceptively advertising that consumers could finance a purchase with low monthly payments when, in fact, the payments were temporary "teasers" after which the consumer would owe a much higher amount, by several hundred dollars. The ads also allegedly violated the TILA and Regulation Z, by failing to clearly and conspicuously disclose certain credit related terms.
Michigan
!!!error: Indecipherable SUB-paragraph formatting!!! , Mich., allegedly violated the FTC Act by sending mailers that deceptively claimed consumers had won a sweepstakes prize, when, in fact, they had not. Some of their ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.
Texas
!!!error: Indecipherable SUB-paragraph formatting!!! companies, including New World Auto Imports, Dallas, Texas, New World Auto Imports of Rockwall, Rockwall, Texas, and Hampton Two Auto Corporations, Mesquite, Texas, allegedly violated the FTC Act by deceptively advertising that consumers could purchase a vehicle for specific low monthly payments when, in fact, consumers would owe a final balloon payment of over $10,000. The companies also allegedly deceptively advertised that consumers could drive home a vehicle for specific low up-front amounts and low monthly payments when, in fact, the deal was a lease and they would owe substantially more up-front. The ads also allegedly violated the CLA and Regulation M, by failing to disclose certain lease related terms, and the TILA and Regulation Z, by failing to disclose certain credit related terms.
The regulations on print and television have been pretty clear, but as more dealerships use YouTube and other online media for advertisements. That "fine print" can get glossed over easily. Now the FTC has expanded their reach to investigate deceptive ads in digital formats as well.
As car-buyers become more savvy, some dealerships are adapting, but others are finding new tactics to pull the same old "stealership" tricks. !!!error: Indecipherable SUB-paragraph formatting!!! My recommendation is to try and steer clear of any dealership that engages in this type of advertising practice. It is a sign of their operational strategy and what you can expect when it comes down to negotiating a fair price.
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My name is Tom and I run !!!error: Indecipherable SUB-paragraph formatting!!! I am a professional car-buying consultant, which means people pay me to help them select the right car (NO YOU CAN'T HAVE A PRIUS) and negotiate with the dealerships to get them the best price. If you have any other questions or suggestions for future posts about the car-buying process please let me know. You can find some of my other posts on car-buying !!!error: Indecipherable SUB-paragraph formatting!!!
You can also find me !!!error: Indecipherable SUB-paragraph formatting!!! and !!!error: Indecipherable SUB-paragraph formatting!!!
![]() 03/31/2014 at 13:26 |
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this being exactly what I do for a living I have seen this coming for quite a while. There will always be some avenue of advertising for nefarious dealerships to run janky ads through, but it has been the wild west for some time on Adwords, Bing, display, and if you are stupid enough, on your website. Glad to see some more enforcement
![]() 03/31/2014 at 13:33 |
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What is this again about protecting dealerships FOR consumers?
![]() 03/31/2014 at 13:38 |
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hahaha even though my bread and butter is working for dealerships, I am all about freedom to sell however you see fit, as long as it is ethical. I am sad some of my biggest clients are the ones that feel threatened by this guy
![]() 03/31/2014 at 13:38 |
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I think everyone who's buying a new/CPO car should go through you nowadays if only for the connections you've made.
![]() 03/31/2014 at 13:39 |
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I have a lot of contacts in my area, but across the country not so much.
![]() 03/31/2014 at 13:56 |
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Yes! I qualify.
*high-fives self*
![]() 03/31/2014 at 14:04 |
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Fowlerville Ford! I've passed them a million times!
And I get those "sweepstakes" "gauranteed to win!" mailers from all kinds of dealers in my area.
Specifically Jack Demmer Ford in Wayne, MI.
![]() 03/31/2014 at 14:08 |
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My favorite one was the Ford in Annapolis. Went there for the gf to buy a 2012 Focus. She had a price from the newspaper and was ready to roll. The add read something like $21000, save $4000 = $17000. Get there to buy the car and the guy is adds on the delivery fee, which was included in the $21000 price. After I got him to admit that we couldn't get the car for $4000 off he came up with my favorite line "Everyone is doing it, you can't blame us for it!".
She went somewhere else and got a straight price on the Focus she wanted. She should have kept looking, that Focus is a lemon.
![]() 03/31/2014 at 15:24 |
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Well, I guess a 'thank you' is in order. I pass Fowlerville Ford all the time on the way the work.
![]() 04/07/2014 at 00:53 |
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DCT? Those have been pretty rough for Ford.
When I bought my Focus it was listed at $19,300 and there were an advertised $3500 in rebates. They didn't tell me until negotiation time that $19.3 was after those rebates were applied. I ended up walking away and coming back a couple days later to get them down another couple grand. I actually saved the ad just to confirm that I'm not crazy.
![]() 04/07/2014 at 00:54 |
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Honda of Hollywood , Los Angeles, and Norm Reeves Honda of Cerritos, Calif., violated the FTC Act by deceptively advertising that consumers could pay $0 up-front to lease a vehicle
Honda of Hollywood has the cheapest prices for OEM Honda motorcycle parts I can find, I've ordered from them several times when I'm making a big order. Even with $10 shipping, it's still often cheaper than buying in person at my local Honda place.
![]() 04/07/2014 at 06:08 |
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I worked for Paramount Kia in Asheville when I was 20. If they're still the same, I'm not all all surprised.
![]() 04/07/2014 at 08:24 |
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Bill Brown Ford in Livonia MI used to mail those babies out all the time as well.