2018 GNYADA Membership Directory

Placement – The location of the disclosure within the advertisement must be such that ordinary consumers would notice it. Small print asterisks or footnotes, even those next to the qualified term, do not meet this standard. Referring consumers to another document or location, such as “see dealer for details,”is generally unacceptable. Presentation – Language should be in “plain English.” It should not scroll across media or be of such detail and depth that the average consumer would not likely read or understand it. There should be no distracting elements in the ad that compete for attention with the disclosure. The disclosure should be presented unambiguously and in short phrases. Oral disclosures in radio or audio media must be in a volume and cadence that a reasonable consumer can hear and understand. Disclosures made in online or social media advertising present some unique challenges. This topic is discussed below. Deceptive Advertising Examples The following are a few examples of deceptive advertising by a dealer: • Marketing a programwhere the consumer’s outstanding debt on a trade-in vehicle would be paid off, no matter how much the consumer owed, but in reality the dealer either financed the“negative equity”or required it to be paid off by the customer in cash. • Failing to disclose that “dealer discounts” and “Internet prices” would require customers to qualify for other discounts that were not generally available (e.g., military member, recent college graduate, etc.) and that even with these other discounts, the consumer would wind up paying a higher price for the vehicle than advertised. • Advertising biweekly payment plans claiming that the plan would save consumers money on their financing by shortening the duration of the financing and thus lowering total interest paid, but the marketing materials fail to disclose that the fees charged for participating in the program outweigh any potential savings. In 2016-2017, the FTC announced a series of settlements with auto dealers regarding advertising of used vehicles subject to unaddressed open recalls. In these cases, the FTC asserted that it was deceptive for dealers to advertise that used vehicles offered for sale were subject to a rigorous inspection when that inspection process did not identify and repair open recalls. The FTC argued that “rigorous inspection” claims constituted an implied representation that the vehicles were not subject to any unaddressed recalls. The FTC further claimed that such implied representations were likely to mislead reasonable consumers if the vehicles offered for sale were, in fact, subject to open recalls. These settlements required the dealers to supplement any inspection claims with a clear and conspicuous disclosure that vehicles offered for sale, even those that the dealer inspected, may be subject to an open recall. This disclosure also needed to explain how consumers could determine whether a particular vehicle offered for sale had any unrepaired recalls. Some Dealer Advertising Practices to Avoid The FTC is aggressively challenging deceptive dealer advertising. Below is a non-exclusive list of “don’ts” that the FTC and others have indicated dealers should avoid: 1. Deceptive pricing. This is where the dealer makes misleading statements or omits material information about the price or terms of an offer. It is deceptive to state a price when that price excludes other significant fees and charges, unless the fees and charges are clearly and conspicuously disclosed.

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