{"id":593,"date":"2015-09-24T23:12:21","date_gmt":"2015-09-24T23:12:21","guid":{"rendered":"http:\/\/www.ftcguardian.com\/articles\/?p=593"},"modified":"2017-03-17T05:59:11","modified_gmt":"2017-03-17T05:59:11","slug":"ftc-7-deadly-ad-sins-some-bhph-dealers-commit","status":"publish","type":"post","link":"https:\/\/www.ftcguardian.com\/articles\/ftc-7-deadly-ad-sins-some-bhph-dealers-commit\/","title":{"rendered":"FTC: 7 Deadly Ad Sins Some BHPH Dealers Commit"},"content":{"rendered":"
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FTC: 7 Deadly Ad Sins Some BHPH Dealers Commit<\/h1>\n
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Although this article\u00a0is specifically addressing buy-here, pay-here car dealerships, the ‘7 deadly\u00a0sins' referred to by the FTC director are applicable, in one way or another, to most advertising practices in any business. We at FTC Guardian cannot stress enough how important it is to educate yourselves as business owners about the FTC and its guidelines and what measures can be taken to avoid drawing suspicion from regulators.<\/p>\n

Cindy Liebes, director of the FTC\u2019s Southeast region, shared what she deemed to be the \u201cseven deadly advertising sins\u201d buy-here, pay-here dealers commit that place them in the center of her regulatory radar.<\/p>\n

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\u201cRegulatory actions against unscrupulous dealers promote fair competition, which is good for any industry and protects the players trying to do the right thing,\u201d she continued..<\/p>\n

Liebes outlines lessons for dealers learned from Operation Ruse Control, an initiative she led where the FTC partnered with 32 other governmental agencies. The regulatory project resulted in 252 enforcement actions against dealers nationwide.<\/p>\n

\u201cWhile I can\u2019t speak about current non-public investigations, it\u2019s important for dealers to know that the FTC is committed to bringing law enforcement actions in the auto industry,\u201d Liebes said. \u201cWe don\u2019t pay attention to the size of a dealer either. Big and small stores need to get their house in order.\u201d<\/p>\n

According to Liebes, dealers\u2019 violations include:<\/p>\n

1. Twisting the facts about add-ons<\/strong><\/p>\n

For example, the FTC recapped a California-based company deceptively claimed in online ads and through a network of authorized dealers that vehicle buyers who purchased its biweekly payment program would save money. Consumers weren\u2019t told that the cost of the add-on often outstripped any savings. This case resulted in a $2.475 million settlement of refunds and fee waivers.<\/p>\n

2. Lowballing your pitch<\/strong><\/p>\n

The FTC indicated several dealers recently \u201ccrossed the line\u201d by using headlines to tout bargain prices while failing to adequately disclose the true cost of the deal. For example, one Florida dealership pitched \u201cused cars as low as $99.\u201d<\/p>\n

But $99 was just the minimum bid for vehicles offered at a liquidation sale, and that didn\u2019t include substantial mandatory fees. The ads also included photos of loaded cars without clearly explaining that some pictures featured \u2014 like spoilers and sunroofs \u2014 weren\u2019t included in the price.<\/p>\n

3. Luring customers with misleading \u201czero\u201d promises<\/strong><\/p>\n

The regulator explained one California dealer\u2019s deceptive use of zero promised \u201c$0 initial payment, $0 down payment, $0 drive-off lease.\u201d Another ad promised \u201c$0 down, 0 percent APR financing, 0 payments and 0 problems.\u201d But consumers had to pay much more up-front to lease or purchase the cars. And \u201c0 percent APR?\u201d The annual percentage rate for financing those vehicles for the advertised payment was way more than zero percent.<\/p>\n

4. Hiding the strings attached to a deal<\/strong><\/p>\n

The FTC mentioned an Alabama dealership highlighted eye-catching prices without clearly explaining what the vehicle would really cost consumers. In some cases, ads featured prices that factored in special discounts or rebates that weren\u2019t available to everyone. For example, some prices applied only to recent college graduates, a restriction not prominently disclosed.<\/p>\n

5. Burying key disclaimers in fine print<\/strong><\/p>\n

The regulator pointed out the fine-print footnotes, unclear \u201cdisclaimers\u201d that consumers must scroll down to see, or other buried information won\u2019t live up to the FTC\u2019s \u201cclear and conspicuous\u201d standard. Advertisers often ask how big a disclosure must be, but it\u2019s more than a matter of font size. A clear and conspicuous disclosure is one sufficient for consumers to actually notice, read and understand.<\/p>\n

6. Ignoring applicable credit laws<\/strong><\/p>\n

The FTC noted one common pothole is using certain \u201ctriggering terms\u201d under the Consumer Leasing Act, Truth in Lending Act, Reg Z or Reg M without making required disclosures. For example, if operators advertise monthly lease payments, that kicks in a requirement under the Consumer Leasing Act that you disclose other facts about the transaction \u2014 like the total amount due at lease signing; whether a security deposit is required; and the number, amount and timing of scheduled payments.<\/p>\n

7. Violating prior orders<\/strong><\/p>\n

The FTC may seek monetary civil penalties for violations of prior FTC administrative orders. For example, the FTC recently brought two actions alleging violations of administrative orders, which prohibited dealers from deceptively advertising the cost of buying or leasing a car. One action resulted in the dealer group paying a hefty civil penalty, and the other action is pending. These actions show that there can be a financial cost for violating FTC orders.<\/p>\n<\/div>\n

via FTC: 7 deadly ad sins some BHPH dealers commit<\/a><\/p>\n

Here\u2019s How To Make Sure You,<\/span>
\n<\/span>Your Business & Website Is FTC Compliant<\/span><\/span><\/h2>\n

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?<\/span><\/p>\n

Smart business owners around the world are doing it with the help of <\/span>FTC Guardian<\/span>.<\/span><\/p>\n

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.<\/a><\/p>\n

The training is titled: 3 Tragic (Legal) Privacy Policy List Building Mistakes That Can Get You In Hot Water With The FTC Today – Resulting In Your Business Being Shut Down… And How To Solve It!<\/strong><\/a><\/p>\n

Here are some of the things you\u2019ll discover on the training:<\/span><\/p>\n