Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Auto dealer settles FTC charges of deceptive advertising, (Mar 21, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC announced today that a Massachusetts auto dealer has agreed to settle FTC charges that the dealership violated the FTC Act by deceptively advertising that consumers could lease a vehicle for $0 down and specific monthly payments when, in fact, the advertised amounts excluded substantial fees. The ads also violated the Consumer Leasing Act (CLA) and Regulation M, by failing to disclose or clearly and conspicuously disclose certain lease related terms.

According to its complaint (In re Matter of Courtesy Auto Group, Inc., File No. 132-3171), the FTC charged that Courtesy Auto Group’s advertising failed to clearly disclose additional important terms of advertised leases, including whether consumers must pay additional fees, the number of lease payments, and extra charges that may be imposed at the end of the lease.

This case was brought as part of Operation Steer Clear, the FTC’s nationwide investigation against 10 auto dealers announced in January. The FTC also announced final consent orders with two additional dealers in February. These cases are all a part of the FTC’s ongoing efforts to combat deceptive motor vehicle dealer practices and protect consumers in the auto marketplace.

The proposed consent order prohibits Courtesy Auto from engaging in similar deceptive advertising practices in the future. It prohibits the dealership from misrepresenting in any advertisement for the purchase, financing, or leasing of motor vehicles the cost of leasing a vehicle, the cost of purchasing a vehicle with financing, or any other material fact about the price, sale, financing, or leasing of a vehicle. Courtesy Auto is further prohibited from stating the amount of any payment, or that any or no payment is required at lease inception, without clearly and conspicuously disclosing the terms required by the CLA.

The Commission vote to accept the consent order for public comment was 4-0.

Companies: Courtesy Auto Group, Inc.

News: Advertising ConsumerProtection FederalTradeCommissionNews