FTC Crackdown Targets Auto Dealer Ads With Misleading Prices.

The Federal Trade Commission is cracking down on automotive advertising, sending warning letters to nearly 100 audio dealership grounds nationwide about potentially including deceptive prices in their ads. The FTC says the move is aimed at preventing auto dealers from misleading consumers with low advertised prices and then adding on mandatory fees at the end of the purchasing process.

“I encourage you to review your practices, including by making sure the prices you advertise include all required fees and charges aside from required government charges, to ensure you are complying with applicable laws,” writes Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, in the letters. “This would include, at a minimum, evaluating your advertised prices and actual prices and confirming they match,” he says.

The government isn’t accusing any of the 97 dealership groups of violating federal law. But in the warning letters it lays out several examples of illegal pricing practices that they may be including in their commercials. That includes;

• advertising a price that does not reflect all required fees

• advertising a price that reflects rebates or discounts not available to all consumers

• advertising a price that fails to take into account the amount of an additional required down payment

• conditioning the advertised price on consumers using dealer financing

• requiring consumers to buy additional items not reflected in the advertised price

• advertising unavailable or nonexistent vehicles

“Such deceptive tactics harm not only consumers, but competition, by making it hard for law-abiding businesses to compete on an even playing field,” Mufarrige tells the dealerships.

The FTC did not release which businesses the warnings were sent to, but will continue to monitor the marketplace, and will take additional action if warranted to ensure compliance with federal rules and regulations. “The FTC will remain focused on monitoring auto dealerships to ensure that the market functions efficiently and competitors are transparently competing on price,” Mufarrige says.

The Commission already has several pending actions brought to address deceptive pricing practices in the auto industry including cases against dealerships in Maryland, Illinois, and Texas.