FTC cracks down on auto dealer ads

FTC cracks down on deceptive advertising by auto dealers

Associated Press

WASHINGTON (AP) -- The Federal Trade Commission says it is cracking down on deceptive advertising by auto dealers.

The agency said Thursday that it has reached agreements with nine auto dealers nationwide to settle deceptive advertising charges, and is taking action against a tenth as part of a sweep focusing on the sale, financing, and leasing of motor vehicles.

The FTC said that it received complaints about dealers nationwide that made a variety of misrepresentations in print, online and video advertisements that violated the FTC Act. They said the ads falsely led consumers to believe they could purchase vehicles for low prices, finance vehicles with low monthly payments or make no upfront payment to lease vehicles. Shoppers then faced much different costs to complete the purchase or lease.

"Buying or leasing a car is a big deal, and car ads are an important source of information for serious shoppers," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "Dealers' ads need to spell out costs and other important terms customers can count on."

The agency said it settled with dealers in California, Georgia, Illinois, North Carolina, Michigan and Texas. Under proposed agreements, the dealerships will not use such advertising practices in the future. The agreement is open for public comment and then the commission will decide whether to make the orders final.

The FTC also issued an administrative complaint against a Massachusetts dealership. The commission alleges the dealership violated the FTC Act by advertising that consumers can lease a vehicle for $0 down and specific monthly payments when, in fact, the advertised amounts exclude substantial fees.

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