The Crackdown on Misleading Ads From Car Dealers

Car dealerships can sometimes engage in dishonest tactics, including dealerships affiliated with vehicle manufacturers.  One example of problems with dealers is misleading ads. The Federal Trade Commission (FTC) is strict on this issue in order to provide strong protection for consumers. 

Car manufacturers and authorized dealers may also sell cars with defects, in some cases. When this happens, San Diego lemon law protects consumers from loss. An attorney can provide assistance to consumers who are facing problems with cars they have purchased.

A Closer Look at the Crackdown

Automotive News reported on a recent FTC crackdown on dealership ads that are unclear and misleading to consumers. 

The law is clear when it comes to protecting car buyers. All ads are required to show deals for which the average person could actually potentially qualify. Additionally, dealers cannot promise deals that are limited only to extremely rare situations that most people will never be eligible to take advantage of. Car dealer ads that discuss deals also have to be easy for the average consumer to understand.

When a car dealer makes deceptive ads or ads that are in violation of consumer protection laws, there can be consequences. The FTC recently pursued a case against two car dealers who were not following the rules. The dealers settled the FTC charges.

The charges alleged that they had run a joint ad which promoted low monthly lease payments. However, the dealers didn't include pertinent details and essential terms in the ad, such as making clear the deal was limited to people who had eligible credit scores.

The ads did reference beacon scores in its disclosures, but these scores are specific to auto lending and are not the generally accepted credit scores that most people are familiar with. The ad stated that the lease terms being offered were limited to people who had an 800 or higher beacon score and approved credit.  

Consumers wouldn't understand what a beacon score was in most cases and wouldn't realize that just 20 percent of people have a beacon score of at least 800.

Even this disclaimer, which wouldn't make the terms clear to the average consumer, was listed only at the bottom of the advertisement. It was listed in fine print, and it was not listed near where the advertised vehicles or lease terms were. 

There were two columns in the ad, with three vehicles advertised on the left and six vehicles advertised on the right. Next to each picture of the car was the lease cost per month, and the ad promised 10 times that consumers could just “Sign & Drive” with nothing down.

The FTC believed that the disclosures weren't sufficient in the ad and the deals being offered weren't offers of which most consumers could take advantage. The dealers had thus violated the rules.  They had to settle with the FTC for this violation and the settlement involved agreeing to detailed ad monitoring for 20 years.

These two dealers were among many car dealers who were caught in the recent Operation Steer Clear crackdown that occurred in 2014 when the FTC intensified its focus on deceptive car advertising.  With Operation Steer Clear, the FTC is fulfilling its important role in making sure consumers aren't harmed by misleading ads. 

Whenever car manufacturers or dealers break consumer protection laws, there should be consequences. A lemon law lawyer can provide assistance to consumers whose problems are with a vehicle they have purchased that turned out to be defective. Contact an attorney today to learn more.