GNYADA 2019 Membership Directory & Services Guide

hot topics / 2019 membership directory & services guide

group with falsifying consumers’ income and down payment information on vehicle financing applications and misrepresenting financial terms in vehicle advertisements.This is the first time the FTC has brought such an income falsification claim. In addition, the FTC continues in its more traditional pursuits of advertising and disclosure violations, including recall notices used as a tool to increase business. In fact, in a recent public statement, the FTC warned consumers about fake recall notices from car dealerships and provided tips for checking the veracity of such notices. State UDAP Laws State UDAP laws are not uniform and a number of states apply different tests for “unfairness” or “deception” than does the FTC. Many enumerate specific practices deemed to be unfair. Others use differing standards that include: (1) whether the practice, even if not previously considered unlawful, offends public policy under any state authority; (2) whether it is unconscionable, unethical, immoral, oppressive, or unscrupulous; and (3) whether it causes substantial injury to consumers. In particular, state standards for “unfairness” may include a lower threshold for liability than the FTC’s “unfairness” standard. Many state UDAP laws also cover Internet or out-of- state transactions if a resident of the state is adversely affected. You should be aware that state Attorneys General are very liberal in using UDAP laws to bring claims against auto dealers. Private lawsuits, especially class actions, present another risk under state UDAP laws. Examples of suits brought against dealers include: • Misrepresentations about the vehicle’s fuel efficiency, safety features, and warranty; • Payment packing; • Retaining amounts of itemized sums listed as “amounts paid to others” on retail installment sales contracts without disclosing that the dealer may retain part of the funds; • Concealing negative equity in the cash price of a vehicle; • Violating the FTC’s Used Car Buyer’s Rule which requires a Used Car Buyer’s Guide to be affixed to the window of each used vehicle offered for sale or lease (remember that a federal law violation is automatically a UDAP violation under many state UDAP laws); • Hiding the cost of an “etch”product in the vehicle’s sale price; and • Imposing extra charges when customers who leased cars attempted to exercise their right to purchase at a previously determined price. UDAP plaintiffs may not be bound by contractual limitations of liability or merger clauses, or contributory negligence, and they often do not have to prove reliance on the act or practice. Arbitration clauses may not apply as well depending on state law and how the clauses are drafted. Also, courts have ruled that it is not a good

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