Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC Sends Warning Letters to Arkansas Used Car Dealers for Not Displaying "Buyers Guides", (Jan 25, 2013)
By Jeffrey May, J.D.
Eleven used car dealerships in Jonesboro, Arkansas, were warned by the FTC that their sales practices violate the Commission’s Used Car Rule (16 C.F.R. Part 455), the agency announced today. The rule provides a uniform method for disclosing warranty information on a window sticker called the “Buyers Guide” that dealers are required to display on used cars offered for sale to consumers.
FTC staff inspections found that eight dealers failed to display Buyers Guides on almost all used cars offered for sale, and that three dealers failed to display the guides on a significant number of used cars. Warning letters were sent to the 11 dealers, urging them to come into compliance by properly displaying the guides in a clear and conspicuous location on all used cars. The FTC noted that ten of the area dealers were found to have properly displayed the guides on all or nearly all of the used cars offered for sale.
The FTC said that it has brought more than 80 actions since the rule took effect in 1985, with civil penalties totaling more than $1 million, and that hundreds of state actions also have been brought to enforce the rule.
Over the years, the FTC has conducted other sweeps of used car dealerships to check for Used Car Rule compliance. Among the most recent sweeps were inspections conducted in Washington, D.C. and suburban Chicago in 2000, and in New York in 2001.
FTC actions challenging Used Car Rule violations were more common in the 1990s. However, it appears that the rule is back on the agency's radar screen. Just last month, the FTC announced plans to make changes to the rule.
On December 12 and December 17, the FTC published nonsubstantive changes and a notice of proposed rulemaking and request for public comments regarding its Used Car Rule and the Used Car Buyers Guide (77 Federal Register 73912, December 12, 2012, and 77 Federal Register 74746, December 17, 2012). The nonsubstantive changes will take effect on February 11, 2013.
The FTC is seeking public comment on the following four proposed changes to the Buyers Guide:
Adding boxes to the back of the Buyers Guide where dealers would have the option to indicate manufacturers’ and other third-party warranties;
Adding a statement to the Buyers Guide encouraging consumers to seek vehicle history information and directing consumers to an FTC website for more information about vehicle histories;
Adding catalytic converters and airbags to the List of Systems on the back of the Buyers Guide; and
Adding a statement in Spanish to the English Buyers Guide directing consumers who cannot read the Buyers Guide in English to ask for a copy of it in Spanish.
The FTC last reviewed and amended the Used Car Rule in 1995.
News: ConsumerProtection FederalTradeCommissionNews