GNYADA 2019 Membership Directory & Services Guide

Proximity – Disclosures should be located close to the terms being qualified. A small footnote at the bottom of the page or image is generally not sufficient. Nor is putting the disclosures on another page of a brochure or another screen or page of a website not close to the qualified term, or referring consumers to another location entirely to see the material terms (such as “see dealer for details”). In digital advertising, if hyperlinks are used to direct the consumer to the disclosure, they must be prominently displayed and clearly labeled to convey the importance and nature of the information. Information essential for consumers to understand the offer should not be disclosed through a hyperlink. 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. • Marketing a program where 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 99 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 Deceptive Advertising Examples The following are a few examples of deceptive advertising by a dealer:

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PG 170