GNYADA March 2015 Newsletter

7 NADA Issues New Compliance Guide on Federal Advertising Rules

Regulatory Counsel. “It’s essential that dealers consult with their legal counsel to determine – and to ensure that their advertisements are consis- tent with – the full scope of their advertising responsibilities.” The guide is part of NADA's Management Series, Driven . It is available at www.nada.org . Dealer Advertising Seminar: New Federal & State Compliance Mandates APRIL 21, 2015 Speakers: Randy Henrick Associate General Counsel, Dealertrack Stuart Rosenthal, Esq. Email phyllisa@gnyada.com to register. Conducting periodic reviews of dealership policies (including the CSI interference prohibition) with employees; Performing periodic self-audits of deal jackets and other relevant material to identify any suspicious behavior; and Following through with stated con- sequences for CSI tampering, including termination of employees participating in this activity. Please contact Susan Bieber at the Association to discuss Franchise Law issues at 718.746.5900, or susan@gnayda.com .

The National Automobile Dealers Association (NADA) issued a new publication at their annual convention that will assist new car dealers in complying with federal advertising requirements on the sale, financing, and leasing of automotive products and services. The NADA guide provides examples of “bad” and “good” ads as well as chapters on 41 different federal advertising topics, such as the use of discount claims, e-mail advertising, green marketing claims, Internet advertising, satisfaction guarantees, and trigger terms. “The guide is user friendly and is a valuable resource for the entire auto industry,” said immediate past NADA Chairman Forrest McConnell. “We are encouraging dealers to provide A Dealer Guide to Federal Advertising Requirements Subaru of America is claiming that one of its dealers forged more than 200 customer satisfaction surveys to improve its CSI score and avoid termination. Subaru alleges that dealership employees completed customer satis- faction surveys during their lunch breaks, using information obtained from customer files that did not con- tain valid email addresses. Subaru became aware that something was amiss when they discovered that hun- dreds of completed surveys came from the same IP address. 8

the publication to their advertising agencies, manufacturers, finance companies, and others involved in advertising operations.” The release of the guide coincides with recent intense scrutiny by the Federal Trade Commission of dealer compliance with federal advertising standards. Since 2012, the FTC has initiated five separate rounds of advertising enforcement actions against 18 dealers in 12 states for multiple advertising violations, including actions against three dealers that the FTC announced last December. “The guide does not address addition- al advertising requirements that may be imposed at the state or local level, which vary considerably and need to be fully addressed when dealer ads are reviewed for legal compliance,” said Paul Metrey, NADA Chief email addresses when a vehicle is purchased or brought in for service. These are then shared with Subaru, which uses them to send service reminders and other related materials. Avoid CSI Tampering Customer satisfaction survey interfer- ence may be considered fraud under a Dealer Agreement and could subject the dealership to termination. Dealers must ensure that no such activity occurs at their dealership. Steps to prevent CSI tampering include: Maintaining a written policy signed by all employees that prohibits CSI tampering; n

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Manufacturer Sues Dealership Over Customer Satisfaction Surveys

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Dealers are expected to collect valid

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • March 2015 5