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The Federal Trade Commission has extended the deadline until May 1 for the public to submit comments on topics that should be examined as part of a June 28 workshop on the consumer privacy and security issues posed by automated and connected motor vehicles.

Last month, the FTC and the National Highway Traffic Safety Administration (NHTSA), which is co-hosting the workshop, called on the public to submit comments on the privacy and security issues associated with connected cars. The comment deadline, originally set for April 20, has been extended to May 1 at the request of stakeholders.

A list of suggested questions and information about submitting comments can be found on the workshop’s detailed public notice.

The workshop will be held June 28 at the FTC’s Constitution Center, 400 7th St., SW, Washington, DC.

It will be webcast live on the FTC’s website. Registration information, an agenda, directions to the FTC’s Constitution Center building, and a list of speakers will be available on the event webpage.



Published in Compliance News

Auto purchase, financing, and leasing will be among the topics at an upcoming Federal Trade Commission workshop.
The FTC is hosting a workshop in San Antonio, Texas, on July 19 to examine financial issues and scams that can affect military consumers, including active duty service members in all branches and veterans. The workshop also will discuss FTC resources available to military consumer advocates and representatives on financial readiness and fraud prevention, including the FTC’s Military Consumer Toolkit, available at
The FTC’s Military Consumer Financial Workshop: Protecting Those Who Protect Our Nation will bring together military consumer advocates, consumer groups, government representatives (local, state, and federal), military legal services and legal clinics (including those at universities), all service branches, and industry representatives.

Published in Finance

Sage Automotive Group – nine Los Angeles-based auto dealerships, their holding and management companies, and two individuals – has agreed to pay more than $3.6 million for return to consumers in order to settle Federal Trade Commission charges that it used deceptive and unfair sales and financing practices, deceptive advertising and deceptive online reviews.
The proposed settlement order will prohibit the defendants from making misrepresentations relating to their advertising, add-on products, financing and endorsements or testimonials.
The proposed order will also bar the defendants from engaging in other unlawful conduct when a sale is cancelled, such as failing to return any down payment or trade-in or seeking legal action, arrest, repossession or debt collection unless the action is lawful and the defendants intend to take such action. It also prohibits them from violating the Truth In Lending Act and Regulation Z, and the Consumer Leasing Act and Regulation M.

Published in Dealers
Tuesday, 07 March 2017 00:01

Auto Complaints Rank Low on FTC Portal

Auto related issues made up 3 percent of consumer complaints received by the Federal Trade Commission’s Consumer Sentinel Network in 2016.
There were 84,673 complaints logged on the website. Auto complaints ranked No. 8 on the overall list.
Debt collection was first with 859,090, making up 28 percent of all complaints.

Published in Legal

The staff of the Federal Trade Commission has provided the Consumer Financial Protection Bureau with an annual summary of its activities enforcing the Equal Credit Opportunity Act.
The FTC is responsible for ECOA enforcement and education regarding most non-bank financial service providers. In the summary, FTC staff describes the commission’s work on ECOA-related policy issues, including those addressed in research and policy development such as a proposed consumer survey to provide insights into consumer understanding of the automobile purchasing and financing process at dealerships; a report outlining questions for businesses to consider to help ensure that their use of big data avoids outcomes that may be exclusionary or discriminatory; a report on fraud in African American and Latino communities; and FTC workshops. The summary also outlines the commission’s business and consumer education efforts on fair lending issues.

Published in Compliance News
Wednesday, 08 February 2017 17:38

Groups Sue FTC over Certified Car Decision

A coalition of consumer groups filed suit against the Federal Trade Commission over its recent certified car decision.
Consumers for Auto Reliability and Safety (CARS), the Center for Auto Safety, U.S. Public Interest Research Group (PIRG), MASSPIRG, CONNPIRG, and CALPIRG filed a legal case seeking to have an appellate court review and overturn the FTC’s consent orders with General Motors, Lithia Motors and Jim Koons Management Co.
The decision would allow GM and the dealers to advertise that cars with unrepaired safety recalls as “safe,” “repaired for safety,” passed a “rigorous inspection,” and qualified to be sold as “certified” cars” – without getting safety recall repairs performed, if the companies provide a disclaimer that the cars “may” be subject to a safety recall.
The groups say the FTC’s Consent Order set a de-facto standard for the auto industry that “allows dealers to deceptively advertise cars with dangerous and potentially lethal safety defects that have killed and maimed people.”

Published in Legal
Sunday, 15 January 2017 04:09

FTC Updates Penalties

The Federal Trade Commission has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions of law the FTC enforces, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
The Act directs agencies to implement annual inflation adjustments based on a prescribed formula. The new maximum civil penalty amounts will take effect upon publication in the Federal Register.
The maximum civil penalty amount has increased from $40,000 to $40,654 for violations of Sections 5(l) and 5(m)(1)(A) and (B) of the FTC Act, Section 7A(g)(l) of the Clayton Act and Section 525(b) of the Energy Policy and Conservation Act. The maximum civil penalty amount has increased from $1,138,330 to $1,156,953 for violations of Section 814(a) of the Energy Independence and Security Act of 2007. The maximum civil penalty amounts for other law violations within the agency’s jurisdiction are listed in the Federal Register Notice.

Published in Crime
Monday, 14 November 2016 01:09

FTC Issues Revised Used Car Rule

The Federal Trade Commission has announced final amendments to its Used Car Rule.
The FTC has sought public comments on a series of proposed changes to the Rule (formally known as the Used Motor Vehicle Trade Regulation Rule), which requires car dealers to display a window sticker, or “Buyers Guide,” on used cars offered for sale. The guide discloses whether the dealer is offering to sell a used car “as is” (without a warranty), or with a warranty.
If the sale is with a warranty, the guide discloses the terms and conditions, including the duration of coverage, the percentage of total repair costs the dealer will pay, and the vehicle systems the warranty covers. In states that do not permit “as is” used car sales, dealers must use an alternative guide that discloses whether the sale is with a warranty or with implied warranties only.
In December 2012, the FTC sought public comments on proposed changes to the Buyers Guide as part of its systematic review of all of the agency’s rules and guides. In response to comments received, the agency sought comments on additional proposed changes to the Used Car Rule and invited comments on alternative approaches that public commenters proposed for the vehicle history disclosure and the “As Is” statement.
As announced, the FTC is revising the Buyers Guide by:

  • changing the description of an “As Is” sale
  • placing boxes on the face of the Buyers Guide that dealers can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available;
  • providing a box that dealers can check to indicate that an unexpired manufacturer’s warranty applies;
  • adding air bags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles;
  • adding a statement that directs consumers to obtain a vehicle history report and to check for open recalls.  The statement also instructs consumers to:
  • visit for information on how to obtain a vehicle history report; and
  • visit to check for open safety recalls;
  • adding a statement, in Spanish, to the English-language Buyers Guide, advising Spanish-speaking consumers to ask for the Buyers Guide in Spanish if the dealer is conducting the sale in Spanish; and
  • providing a Spanish translation of the statement that dealers may use to obtain a consumer’s acknowledgement of receipt of the Buyers Guide.
The amended rule permits dealers to use their remaining stock of Buyers Guides for one year after the effective date of the amended rule.
Published in Legal
Sunday, 02 October 2016 18:53

FTC Accuses Dealers of Yo-Yo Financing

The Federal Trade Commission has charged nine Los Angeles-area auto dealerships and their owners with using a wide range of deceptive and unfair sales and financing practices.
This is the FTC’s first action against an auto dealer for “yo-yo” financing tactics: using deception or other unlawful pressure tactics to coerce consumers who have signed contracts and driven off the dealership lots into accepting a different deal. The FTC also alleges that the defendants packed extra, unauthorized charges for “add-ons,” or aftermarket products and services, into car deals financed by consumers.
According to the FTC’s complaint, the defendants entice consumers, particularly financially distressed and non-English speaking consumers, into their dealerships with print, internet, radio and television ads that make an array of misleading claims, including that vehicles are generally available for the advertised terms and that consumers can buy vehicles for low prices, finance with low monthly payments, or make low down payments.  Other allegedly misleading claims include that consumers can finance the purchase of vehicles – when in fact they are lease offers – and that the defendants will pay off consumers’ trade-in vehicles, despite the fact that consumers ultimately are responsible for paying off any amount owed on the trade-in.
The FTC also alleges that the defendants use phony online reviews to tout their dealerships and discredit negative reviews that highlighted their unlawful practices. They and their employees or agents allegedly post positive, five-star online reviews that purport to be from objective or independent reviewers without disclosing their relationship to the dealerships.
In addition to the deceptive advertising and marketing allegations, the FTC has charged that several financing tactics of the defendants are deceptive and unfair.  As part of the sales and financing process, the defendants offer add-ons such as extended warranties, guaranteed auto protection (GAP), and maintenance or service plans. The FTC alleges the defendants have violated the FTC Act by charging some consumers for add-ons without their consent or falsely claiming the products were required or were free.
And according to the complaint, in some instances after the consumers have signed contracts, the defendants falsely represent that consumers are required to sign a new contract with different terms.  In other instances, the defendants tell consumers who have completed finance contracts that the contracts are cancelled and falsely represent that the defendants are permitted to keep consumers’ down payments or trade-ins.  When consumers request compliance with the terms of the contract or refuse the defendants’ demands, the defendants, in some instances, have falsely represented that consumers will be liable for legal action, including lawsuits, repossession, or criminal arrest for a stolen vehicle.

The FTC’s complaint also charges the defendants with violating the Truth In Lending Act and Regulation Z, and the Consumer Leasing Act and Regulation M, for failing to clearly disclose required credit information and lease information in their advertising.
The defendants are Universal City Nissan, Inc., also d/b/a Universal Nissan; Sage Downtown, Inc., also d/b/a Kia of Downtown Los Angeles; Glendale Nissan/Infiniti, Inc., also d/b/a Glendale Infiniti and Glendale Nissan; Valencia Holding Co., LLC, also d/b/a Mercedes-Benz of Valencia; West Covina Auto Group, LLC, also d/b/a West Covina Toyota and West Covina Toyota/Scion; West Covina Nissan, LLC; Covina MJL, LLC, also d/b/a Sage Covina Chevrolet; Sage North Hollywood, LLC, also d/b/a Sage Pre-Owned; and Sage Vermont, LLC, also d/b/a Sage Hyundai.
Also charged are Joseph Schrage, a/k/a Joseph Sage; Leonard Schrage, a/k/a Leonard Sage; and Michael Schrage, a/k/a Michael Sage; Sage Holding Company Inc.; and Sage Management Company Inc.

Published in Finance
Wednesday, 07 September 2016 14:39

FTC Moves Ahead with Warranty Disclosure Rules

The Federal Trade Commission has announced final amendments to its Disclosure Rule and Pre-Sale Availability Rule to give effect to the E-Warranty Act.

Under the Magnuson-Moss Warranty Act the FTC promulgated the Disclosure Rule in 1975, which provides disclosure requirements for written warranties on products that cost more than $15, specifies language for certain disclosures, and requires simple language in a single document, and the Pre-Sale Availability Rule, which describes how warrantors and sellers must provide warranty terms before a sale.

The 2015 E-Warranty Act amended the MMWA to allow warrantors to post warranty terms online, as long as they also provide a non-Internet-based method as well, and to allow certain sellers to use an electronic method to display warranty terms pre-sale, which necessitated the rule amendments.

In May, the FTC sought public comment on proposed changes to the rules. The final amendments to the Disclosure Rule define what it means for certain disclosures to appear “on the face of” a warranty posted online.

The Pre-Sale Availability Rule amendments allow warrantors to display warranty terms online and provide information to consumers to obtain those terms via non-Internet means. The amendments also allow sellers to supply pre-sale warranty terms electronically or conventionally if the warrantor has chosen to display its warranty terms online.

Published in Compliance News
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