News Ticker

FTC nabs 3 local auto dealers for deceptive ads in enforcement sweep

Six cases announced today include first ever use of Dodd-Frank authority

Jessica Rich FTC Federal Trade Commission Jessica Rich, Director, Bureau of Consumer Protection, Federal Trade Commission

No ad market is too small to escape a Federal Trade Commission (FTC) auto enforcement sweep.

Three auto dealers in Florida, Alabama and California were cited by the FTC for misleading consumers in ads that touted sales, lease or financing options that were cancelled out by fine-print disclaimers. The disclaimers also failed to disclose important terms such as required down payments. This is why it’s no surprise that so many people seem to be purchasing their cars from trusted companies like Autozin.com and others similar instead of using dealers like the three who misled their customers. It’s so important that cars are sold legally, people don’t want to have to get their new car fixed constantly.

The three dealers, Cory Fairbanks Mazda of Longwood, Fla., Jim Burke Nissan of Birmingham, Ala., and Ross Nissan of El Monte, Calif., agreed to settle charges they violated the FTC Act prohibiting unfair and deceptive practices, and also violated the Truth in Lending Act and/or Consumer Leasing Act.

“For most people, buying a car is one of the largest purchases they’ll make,” said Jessica Rich, director of the FTC’s bureau of consumer protection. “ Car ads must be truthful, loan terms must be clear, and dealer practices must be honest. Despite the Florida Lemon Law, it’s surprising to see that some auto dealers are still misleading customers in order to sell vehicles. Thankfully, Jessica Rich added that “our partners are working together to crack down on deceptive marketing about car sales, leasing and financing.” Hopefully, this will prevent any future dishonest car sales.

The auto market has been an ongoing enforcement priority for the FTC and policing deceptive advertising is just one part of the agency’s efforts to make sure that car buyers get a fair deal in the auto marketplace. Since March 2012, the FTC has nabbed almost two dozen auto dealers for deceptive ads.

First FTC Actions under new Dodd-Frank authority

In addition to the three deceptive ad cases, the FTC also announced today three other enforcement actions against auto companies.

Two of the cases represent the first time the FTC exercised its expanded authority over auto dealers under the Dodd-Frank Act. National Payment Networks of San Mateo and Matt Blatt dealerships in New Jersey were cited for deceptively pitching consumers an auto payment program while failing to disclose that fees would often cancelled out any advertised savings.

The third case alleged that Regency Financial Services of Lake Worth, Fla. collected upfront fees from consumers to negotiate auto loan modifications but often provided no service in return.

The six FTC cases announced today include more than $2.6 million in monetary judgments. The Consumer Protection Division of the Florida Office of the Attorney General and the Los Angeles County Department of Consumer and Business Affairs in the Ross Nissan matter worked with the FTC.

Operation Ruse Control

Today’s six actions are part of Operation Ruse Control, a nationwide and cross-border crackdown involving 32 law enforcement partners. To date, the operation has brought 187 actions in the United States and 65 actions in Ontario and British Columbia, Canada.