The Passport group of auto dealerships in suburban Washington, D.C., and a California marketing firm have settled claims they deceptively mailed more than 21,000 fake "urgent recall" notices to consumers, the Federal Trade Commission said this month.
Most of the vehicles covered by the notices did not have open recalls for defects, the FTC said. The notices were an attempt to lure customers to the group's dealerships for repairs and increase business for their service departments, it added. When automakers issue recalls, repairs are free.
Court orders settling the charges bar the defendants from such conduct in the future.
Andrew Smith, director of the FTC's Bureau of Consumer Protection, said that "deceptive fake recall notices may not only trick consumers into visiting a dealership, but also may cause them to ignore legitimate recall notices in the future, risking their safety."
The cited dealerships are Passport Toyota, Suitland, Md.; Passport Nissan, Alexandria, Va.; and Passport Nissan of Marlow Heights, in Maryland. Also named is Temecula Equity Group, which does business as OverflowWorks.com. The FTC said OverflowWorks.com designed the fake recall notices and worked with the defendants to send them.
Passport did not admit wrongdoing and said it disagreed with the findings and wording of the FTC's announcement.
The company insisted that "it was not our intention to mislead anyone ... this advertisement actually did allow us to reach many owners and repair many vehicles with open recalls at no cost to the owners."