In the past three months, the Federal Trade Commission has approved final consent orders involving five dealerships and one loan-acceleration provider for misrepresenting vehicle and add-on costs.
The approvals represent the latest regulatory actions regarding a string of dealerships caught in compliance snags.
The FTC crackdown is part of Operation Ruse Control, “a nationwide and cross-border law enforcement sweep, which targets deceptive auto marketing practices,” an FTC statement said.
The orders prohibit TT of Longwood, doing business as Cory Fairbanks Mazda, from misrepresenting the cost of purchasing, financing or leasing a vehicle. The FTC charged the Longwood, Fla., dealership for running deceptive advertisements that violated the FTC Act and the Truth in Lending Act or Consumer Leasing Act, an FTC statement said.
“Ads touted sales, lease or financing options that seemed attractive but were cancelled out by fine-print disclaimers,” the statement said. Or “the disclaimers did not disclose relevant terms, such as required down payments.”
Terms of the Cory Fairbanks Mazda settlement mirror those of final consent orders that the FTC approved in May for Jim Burke Nissan of Birmingham, Ala., and Ross Nissan of El Monte, Calif., which it had charged with deceptively advertising sales, leasing and finance deals.
The consent orders for those two dealerships prohibit them from misrepresenting the cost of a vehicle in an advertisement and from representing that a discount, rebate, bonus, incentive or price is available unless it is available to all consumers or the qualification terms are clearly disclosed.
As long as they follow the FTC’s orders, the dealerships will pay no monetary fees, an FTC spokeswoman told Automotive News.
In a separate but similar case, the FTC also approved final consent orders for Matt Blatt Inc. and Glassboro Imports, a single company that owns two dealerships in New Jersey. The Matt Blatt dealerships failed to disclose or adequately disclose the fees associated with an add-on service from National Payment Network, a San Mateo, Calif., loan-acceleration program provider, the FTC said.
The order for the Matt Blatt case says that unless the savings are greater than the amount of fees and costs connected with the program, the dealerships are prohibited from representing that a payment program or add-on product or service will save consumers money. The Matt Blatt dealerships must pay the FTC $184,000.
Susan Buehler, spokeswoman for Matt Blatt, said Matt Blatt paid the settlement in December but admitted no wrongdoing. She said the Matt Blatt dealerships have not used NPN for two years.
The FTC previously charged NPN with offering consumers an auto payment program -- essentially, a biweekly payment plan -- that NPN said would save consumers money. NPN failed to disclose that the fees it charged for the program cancelled out any savings, according to the FTC.
The FTC final consent, which was approved in May, requires that NPN provide more than $2.4 million in consumer refunds and waived fees.