Antitrust Law Daily Wrap Up, ADVERTISING NEWS: New York Attorney General settles deceptive advertising charges with six auto dealers, (Mar 24, 2014)
Organizations Mentioned:Albany Dodge | Armory Garage | DeNooyer Chevrolet | DePaula Chevrolet | Goldstein Auto Group, Inc. | Lia Nissan | Zappone Chrysler Jeep Dodge Ram
By Linda O’Brien, J.D., LL.M.
Six auto dealerships have agreed to settle charges that their advertising practices were deceptive and misleading and have pledged to reform their advertising practices, New York Attorney General Eric T. Schneiderman announced today. The dealerships widely promoted sale and lease prices that were illusory because they reflected discounts or rebates that were not available to most consumers and, thus, were not the actual sale or lease price. The Attorney General also announced his intention to file suit against a seventh dealer on related charges.
The Attorney General found that these practices constituted false advertising and fraudulent, deceptive, and misleading business practices. The practices also did not comply with the Attorney General’s Advertising Guidelines for Auto Dealers, which identify certain deceptive advertising practices.
The following six dealerships in the Capital District entered into settlements, agreeing to reform their advertising practices and pay fines ranging from $7,500 to $15,000: (1) Albany Dodge; (2) DeNooyer Chevrolet; (3) DePaula Chevrolet; (4) Goldstein Auto Group, Inc.; (5) Lia Nissan; and (6) Zappone Chrysler Jeep Dodge Ram.
At the dealerships, the advertised prices reflected supposed discounts or rebates such as:
a “military” rebate, which was available only to certain current or former military personnel;
a “college graduate” rebate, which was available only to recent college graduates;
a “lease conquest” or “competitive lease” rebate, which was available only to consumers who had leased a vehicle made by a competing manufacturer; and
a “NE Balloon Cash” discount, which was available only to consumers who financed their purchase.
In some cases, the illusory discounts and rebates totaled as much as $3,000, so the actual price of the vehicle was significantly more than advertised.
The Attorney General’s investigation also cited some of the dealers for other problems with their ads. The settlements required the dealers to reform those practices as well. These problems included: (1) using footnotes or asterisks that contradict, confuse or materially modify a main message of an ad; (2) failing to clearly and conspicuously provide certain required disclosures for lease or finance terms; (3) restricting a rate or price to a “qualified buyer” or “qualified lessee” without disclosing such qualifications; and (4) using a print size that is too small to be read easily.
“A car is one of the most expensive and significant purchases a consumer can make,” Attorney General Schneiderman said. “When shopping for a car, New Yorkers deserve to be dealt with honestly and fairly—not misled by deals that are too good to be true. These settlements ensure that consumers won’t be lured into dealerships by unrealistic prices that have no basis in reality. Those who violate the law will be held accountable by my office.”
Attorney General Schneiderman also served a seventh dealer, Armory Garage, with a statutory notice of his intention to file suit against the dealer. The Attorney General’s investigation found that Armory Garage promoted sale prices that reflected discounts and/or rebates for which many consumers did not qualify.
Companies: Albany Dodge; DeNooyer Chevrolet; DePaula Chevrolet; Goldstein Auto Group, Inc.; Lia Nissan; Zappone Chrysler Jeep Dodge Ram; Armory Garage
News: Advertising NewYorkNews