Advertising a low price but failing to note the price was available only with financing through the dealership at higher than market rates
In the past year, those states’ attorneys general have found an increasing number of dealers who have been deceptive in their advertising, such as promoting a low price for a vehicle but jacking up the annual percentage rate.
Jan. 1 through Oct. 1, Pennsylvania fined dealers $189,000 for advertising violations. That’s up from $71,000 for the year-ago period.
In August, New York fined about 50 dealers nearly $500,000 for such violations, an atypical number, said Christine Pritchard, a spokeswoman in the New York attorney general’s office.
“This was a sweep of auto dealers that attorneys have been looking into for more than a year,” Pritchard said. “The whole purpose was to make a statement to the industry that there are standards the attorney general’s office will hold them to.”
Spokesmen for the National Automobile Dealers Association and the National Association of Attorneys General said they are unaware of other state crackdowns.
Meanwhile, dealer associations in New York and Pennsylvania have pushed their attorneys general for action. The associations in Pennsylvania will meet with Attorney General Mike Fisher on Nov. 20.
“There’s a tendency when the market becomes soft that dealer advertising gets a little closer to the line,” said Kevin Mazzucola, executive director of the Automobile Dealers Association of Greater Philadelphia, which represents 240 dealers. “We want to give out the right information before we get too close to that line.”
New York dealer associations met with Attorney General Eliot Spitzer the week of Oct. 8 to request increased investigations and fines.
“A dealer might be slapped with a $10,000 fine but probably brought in more business than that during the program,” said Mark Schienberg, president of the Greater New York Automobile Dealers Association, which oversees 600 dealers.
Most violations involve print ads, but the attorneys general increasingly are scrutinizing electronic media.
Said Schienberg: “Spitzer has set up a task force to look at the Internet in broader terms. He believes he can oversee deceptive advertising no matter where it takes place.”