2015 GNYADA MEMBERSHIP DIRECTORY

HOT TOPICS 2015 GNYADA Membership Directory

MARKETING AND ADVERTISING VEHICLES AND CREDIT TERMS

Awrinkle on prescreening is“trigger leads.”Trigger leads are sold by credit bureaus that prescreen customers, but the credit bureaus do not communicate the consumer’s name and contact information (usually a cell phone number) to the prescreen client until another auto dealer pulls the customer’s credit report. At that point, the prescreen client (typically a lender or another auto dealer in partnership with the lender) will call the customer on the customer’s cell phone and attempt to induce them away from the original dealership that pulled the credit report. They will do this often by claiming to offer better purchase or financing terms on

the vehicle or aftermarket products. Some customers literally have been called on their cell phones while still in the original dealer’s F&I office.

Trigger leads have been approved by the FTC for consumers seeking mortgage financing. However, neither the FTC nor any court has approved trigger leads for indirect auto finance, and trigger leads in the mortgage context are prohibited in a number of states including Connecticut, Kansas and Kentucky. Prescreening differs from preapproval inquiries in that a consumer who passes the prescreen criteria must receive a firm offer of credit. Persons who do not pass the prescreen criteria do not need to receive adverse action notices unless they otherwise affirmatively apply for credit and are declined. Social Media Advertising Another area of advertising and customer communications is social media, being sites such as Facebook, YouTube, LinkedIn, Twitter and others. These sites have gained increasing popularity – Facebook has over 300 million users in the U.S. Social media sites offer dealers a new way to connect with consumers through consumers’ principal means of staying in touch with friends, colleagues and companies with whom they have an interest or a relationship. All of the advertising laws and regulations described in this Chapter apply to advertising in all media, including social media.

In March 2013, the FTC issued an update to its “Dot Com Disclosures” guide to advertisers on making effective online disclosures. In doing so, the FTC emphasized that consumer protection laws apply to all advertising, regardless of the medium used, and include social media even where there is limited space. Disclosures required to avoid deception or otherwise comply with the law must be presented in a clear and conspicuous manner and space constraints in social media do not relieve you of your obligations to make clear and conspicuous disclosures. You need to understand how your ads—including any disclosures required—will actually display in the medium or media in which

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