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FTC Fines Dealers for Misleading Ads

FTC Fines Dealers for Misleading Ads Featured

Three Dallas area auto dealers, collectively known as Southwest Kia, have agreed to pay an $85,000 civil penalty to settle Federal Trade Commission charges that they violated an FTC administrative order barring them from deceptively advertising the cost of buying or leasing a car.According to the FTC, New World Auto Imports Inc., New World Auto Imports of Rockwall Inc. and Hampton Two Auto Corporation concealed sale and lease terms that added costs or limited who could qualify for vehicles at advertised prices, in violation of a 2014 order.In a TV ad, for example, the dealers offered two cars for “under $200 per month,” but in fine print that appeared for two seconds, disclosed that the offer applied only to leases, not sales, and required a $1,999 payment at lease signing. One dealer mailed ads claiming a new car could be purchased for $179 per month, but in print too small to read without magnification, disclosed that $1,999 would be due up front, along with tax, title and license fees, and that $8,271 would be due at the end of a 38-month financing term.In addition to the $85,000 civil penalty, the proposed order prohibits the dealers, in any ad for buying, financing or leasing vehicles, from misrepresenting the cost of purchase with financing, the cost of leasing, or any other material fact about price, sale, financing or leasing.  It also prohibits misrepresentations that anyone, including those with poor credit, is likely to receive financing or leasing, including particular finance or lease terms.The proposed order also bars the dealers from violating the Truth in Lending Act and the Consumer Leasing Act, which require clear and conspicuous disclosure of credit and lease terms.The case was part of Operation Steer Clear, a nationwide crackdown on misleading advertising regarding motor vehicle sales, financing and leasing.
Last modified on Friday, 26 August 2016 20:31
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