Dear Action Line: Are actions ever taken against car dealers who intentionally advertise low prices on cars that are not in stock or that nobody qualifies for? - S.H., Tulsa.
The Federal Trade Commission is cracking down on deceptive motor vehicle dealer practices and prohibiting dealers from advertising discounts or prices unless the ads clearly disclose any qualifications or restrictions.
"Many new car dealers advertise unusually low interest rates and other special promotions. Ads promising high trade-in allowances and free or low-cost options may help you shop, but finding the best deal requires careful comparisons," says the FTC Consumer Information fact sheet, "Car Ads" at
tulsaworld.com/FTCcarads
"Many factors determine whether a special offer provides genuine savings. The interest rate, for example, is only part of the car dealer's financing package. Terms like the size of the down payment also affect the total financing cost," says the fact sheet.
Two car dealers from Maryland and Ohio have agreed to settle FTC charges that they falsely advertised the cost or available discounts for their vehicles. The FTC charged that Timonium Chrysler Inc., of Cockeysville, Md., violated the FTC Act by advertising discounts and prices that were not available to typical consumers.
Ganley Ford West Inc. in Cleveland, Ohio, also is charged with misrepresenting that vehicles were available at a specific dealer discount when in fact the discounts only applied to specific, and more expensive, models of the advertised vehicles.
"Buying a car is a huge financial commitment, and people often calculate what they can pay down to the penny," said Jessica Rich, Director of the FTC's Bureau of Consumer Protection. "They should be able to depend on the dealers to provide truthful information and they can depend on the FTC to enforce consumer protection laws on the lot."
Timonium Chrysler's website touted specific dealer discounts and Internet prices, but allegedly failed to disclose adequately that consumers would need to qualify for a series of smaller rebates not generally available to them. The complaint further alleges that, in many instances, even if a consumer qualified for all the rebates, the cost of the vehicle was still greater than the advertised price.
Ganley Ford West advertised its discounted vehicles on its website and in local newspapers, and it allegedly failed to disclose that its advertised discounts generally only applied to more expensive versions of the vehicles advertised.
The proposed orders settling the FTC's charges against Timonium Chrysler and Ganley Ford West are designed to prevent them from engaging in similar deceptive advertising practices in the future. The two auto dealers cannot advertise prices or discounts unless accompanied by clear disclosures of any required qualifications or restrictions.
The auto dealers are also barred from misrepresenting the existence or amount of any discount, rebate, bonus, incentive, or price; the existence, price, value, coverage or features of any product or service associated with the motor vehicle purchase; the number of vehicles available at particular prices; or any other material fact about the price, sale, financing or leasing of motor vehicles.
The dealers must maintain and make available copies of all advertisements and promotional materials to the Commission for inspection upon request for the next five years, and they are required to comply with the FTC's order for 20 years.
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Original Print Headline: FTC cracking down on deceptive car dealerships
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Edmunds.com last week released its annual list of Best Used Cars for 2013, a list of 17 cars across every segment based on "the most important criteria: reliability, safety, value and availability."
Dear Action Line: I received a mailing from the IRS and wonder if this is typical. I thought all such notices came by email. Should I call the Tulsa IRS on this? - B.N., Tulsa
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