Beware the pitfalls of digital ads

To steer clear of illegal advertisements, dealers should be mindful of the pitfalls lurking in the digital space.

There has been an industrywide push to put much of the car buying and financing process online, including advertisements. While that’s a good thing for consumers and auto retailers alike, dealers should make sure that online ads don’t come back to haunt them.

State attorneys general think of dealership ads as “low hanging fruit” for fines and penalties for unfair or deceptive acts and practices, Randy Henrick, Dealertrack’s associate general counsel, said in a Dealertrack webinar last week.

Dealerships should consider federal and state laws when developing all ads. But Henrick says that with digital ads especially, many times when dealerships find themselves under regulators’ spotlight, they had no knowledge of technical glitches or no consumer complaints about deceptive advertisements beforehand.

So how would regulators know about dealers’ online ads? They’re trolling for them, Henrick says.

The Federal Trade Commission trolls the Internet, especially social media, looking for deceptive advertisements, Henrick said. Twitter is a faulty medium for advertising credit terms because the FTC requires the ads to be clear and conspicuous and to contain all disclosures necessary. With today’s 140-character limit, that’s virtually impossible.

Facebook can also cut off part of an ad that’s legally necessary.

And with Google, a 4-year-old ad could pop up on the third page of a search, Henrick said. A customer could come into the dealership with the old ad and accuse the store of a Truth in Lending Act violation. To avoid that, dealers should put an expiration date on each Internet ad they run, Henrick said.

Another problem: Ads on dealership websites can fall short when scrolled. Retailers could be asking for trouble, Henrick said.

Dealers should customize their ads so that it doesn’t matter whether the consumer’s device requires vertical or horizontal scrolling; all the necessary information is unquestionably visible.

Providing information online benefits the dealer and consumer overall. It spreads awareness and brings more consumers into the store. But there are pitfalls dealers should be wary of, and they should take the necessary steps to avoid them.

You can reach Hannah Lutz at hlutz@crain.com

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