A second lease advertiser has been hit with federal penalties for failing to clearly promote lease disclosures.
St. Louis car dealer Thomas Suntrup has agreed to pay a $40,000 civil penalty to settle allegations that two of his dealerships violated a Federal Trade Commission order to comply with the Consumer Leasing Act and the Truth in Lending Act.
The settlement comes just more than a month after Mazda North American Operations agreed to pay a total of $5.25 million in state and federal penalties for similar lease advertising violations. In both cases, Mazda and Suntrup made the required disclosures in their lease advertisements, but the FTC contended the disclosures were unclear.
The FTC has not provided specific guidelines on how big the type should be or how long it should remain on a TV screen.
'What is conspicuous to us is not necessarily conspicuous to the FTC,' said Paul Simon Jr., Suntrup's St. Louis attorney. 'The FTC could not point to a single consumer complaint stemming from the alleged inappropriate advertising.'
As part of the settlement, Suntrup was not required to admit wrongdoing.
In 1998, Suntrup Buick-Pontiac-GMC in St Peters, Mo., and Suntrup Ford Inc. of Bridgeton, Mo., agreed to follow a 1998 consent order to disclose important financial information clearly in advertisements.
Although Suntrup's lease commercials made most of the disclosures required by law, the FTC says financial information often was buried in fine print, vanished too quickly from the television screen, or was obscured by distracting audio or images. The agency says the commercials also failed to disclose whether a security deposit was required.
In finance promotions, the FTC says Suntrup commercials omitted critical financial information. For example, one advertisement offered financing for $1 down without disclosing the terms of repayment and annual percentage rate.