Trickery controls the action: 6 tips if the car is your thing

When it comes to car advertising, authenticity should be standard. That’s the message of Operation Trickery Control, a coast-to-coast, coast-to-coast sweep launched by the Federal Trade Commission and state, federal and international law enforcement agencies to stamp out automotive advertising, add-ons, Deceptive practices in financing and auto loan modifications. Serve. The FTC case provides 6 tips to help keep your promotions on the right track.

1. Avoid practices that turn add-ons into bad components. Two of the FTC actions involve add-ons—additional products or services that are added to the sale, lease, or financing of a vehicle. Typical add-ons include extended warranties, Guaranteed Auto Protection (GAP) insurance, credit life insurance, primer, and more. According to the Federal Trade Commission, California-based National Payments Network deceptively claimed in online advertisements and its authorized dealer network that car buyers could save money by purchasing its biweekly payment plan. What consumers are not told is that the cost of add-ons often exceeds the savings. The FTC says this is a material fact that should be disclosed up front. In a related lawsuit, the FTC sued New Jersey distributors Matt Blatt Inc. and Glassboro Imports LLC for promoting NPN’s deceptive add-on products and charging high commissions. To resolve the case, NPN will provide $2.475 million in refunds and fee reductions to consumers. The dealer will hand over an additional $184,000.

2. Don’t promote things in a low-key manner. Three cases under Operation Trickery have raised questions about alleged deceptive advertising by car dealers. Some cross the line by taking advantage of the headlines to tout bargain prices but failing to disclose — or not adequately disclose — the true cost of the deal. For example, Cory Fairbanks Mazda in Longwood, Florida, advertises “Used cars as low as $99.” But according to the FTC, $99 is just the minimum bid for a car at a liquidation auction and doesn’t include numerous mandatory fees. Likewise, the FTC said dealer ads included photos of fully loaded cars but failed to clearly state that some of the features in the pictures, such as spoilers and sunroofs, were not included in the price.

3. Avoid deceptive “zero-sum” games. like seinfeld Rose Nissan in El Monte calls itself a show with no content, and its ads have no content – such as “$0 down, $0 down, $0 lease.” The California company made the same statement in a Spanish-language ad. Other ads promise “$0 down*, 0% APR financing*, 0 payments* and 0 questions.” Well, one of the issues with the FTC is – among other things – the deceptive use of “zero.” If a consumer wishes to purchase the advertised car at the advertised monthly payment, the dealer’s “$0 at lease start” deal does not apply. How about “0 down payment”? In fact, people must make a down payment to finance the vehicle for the advertised monthly payments, the FTC said. And “0% APR?” Financing these cars with advertised payments has an APR of well over 0%. (The complaint against Cory Fairbanks Mazda made similar allegations of deceptive “zero” claims.) Message to dealers: Don’t lure customers with misleading “zero” promises.

4. If there are additional conditions, please clearly explain them to consumers in advance. That’s the message of the Federal Trade Commission’s settlement with Jim Burke Nissan in Birmingham, Alabama. According to the complaint, dealers emphasized the compelling price without clearly explaining how much the car would really cost consumers.For example, in some cases, what appears to be full price is actually the price people have to pay back They made a down payment of up to $3,000. Other advertised prices take into account special discounts or rebates that may not be available to everyone. For example, some prices are only available to recent college graduates, but this restriction isn’t clearly revealed. Advertisements did not tell potential buyers of sheepskins that did not have fresh ink that they would have to pay more. (Corey Fairbanks’ complaint includes a similar allegation that the company didn’t clearly explain who was eligible for the advertised discounts or prices — that it only applied to previous Mazda owners, for example.) Other dealers can What can be learned from these cases? Clearly disclose material restrictions and limitations.

5. Beautiful footnotes and hidden “disclaimers” don’t work. Advertisements by Jim Burke Nissan, Ross Nissan of El Monte and Cory Fairbanks Mazda, FTC says All contain variations on a deceptive theme: fancy footnotes, unclear “disclaimers” that consumers must scroll down to see, or other hidden information. Does not meet the agency’s “clear and conspicuous” standards. Advertisers often ask how big disclosures must be, but it’s not just a matter of font size. A clear, prominent disclosure is enough for consumers to actually notice, read and understand it.

6. Give credit law the credit it deserves. The lawsuit against the three dealers accuses them of violating federal credit regulations. A common problem is using certain “trigger provisions” in the Consumer Leasing Act, the Truth in Lending Act, Reg Z or Reg M without making the required disclosures. For example, if you advertise monthly lease payments, the CLA requires you to disclose additional facts about the transaction, such as the total amount due at lease signing, whether a security deposit is required and the amount, amount and amount. Schedule payment time.

Also part of Operation Ruse Control: an enforcement action against Florida-based Regency Financial Services and its CEO, Ivan Levy. The company charged financially strapped consumers upfront fees to negotiate modifications to their auto notes, but often offered nothing in return, according to the Federal Trade Commission. A federal judge froze the defendants’ assets and issued a stipulated preliminary injunction. In this case, litigation continues.