GNYADA March 2015 Newsletter

9 FTC Hits Dealers in New Sweep Results in 187 Enforcement Actions – $2.6 Million in Judgments

Loan Application Fraud– dealers used straw purchasers or changed customer information on credit appli- cations to ensure loan qualification for vehicles customers may not have been able to afford. The FTC expressed particular concern over purchase add-ons sold by deal- ers. The agency settled with a New Jersey dealer and a company offering bi-weekly payment plan to customers. The FTC claims that these bi-weekly pay plans include service fees that exceed any potential savings gained from the bi-weekly payments. Fines & Liability The NJ dealer will pay $184,000 to the FTC while the company offering the automatic bi-weekly payment plan will pay $1.5 million to consumers and $949,000 directly to the FTC. The Agency indicated that criminal prosecutions could be forthcoming seeking sanctions, including jail time, for individuals (i.e.: sales people, sales managers and F&I) found to have committed bank or wire fraud or other wrongdoing.

the mortgage industry have now been assigned to focus their attention on auto dealers. The FTC also said that enforcement action against auto deal- ers is ongoing. GNYADA is hosting a Compliance Seminar on April 21 at GNYADA’s CAET. See the enclosed flyer or email phyllisa@gnyada.com . FTC Compliance Advertising Compliance for Dealers APRIL 21, 2015 10:00am – 12:00pm Center for Automotive Education & Training The FTC has targeted the auto industry for enforcement activity. Experts will review the FTC’s recent activity to inform dealers how to avoid the same mistakes. Deceptive advertising remains a hot topic for enforcement at the local, state and federal levels. Join the discussion by con- tacting Phyllis at GNYADA.

The Federal Trade Commission (FTC) released the results of

Operation Ruse Control, an enforce- ment sweep of car dealers’ practices on a national conference call with the media and interested parties last week (March 26). The FTC partnered with criminal and civil enforcement agen- cies in the latest investigation. This is the second sweep within a two year time period. Purchase Add-ons– products or services sold by a dealer or third party and added to finance contract or lease. For example, the FTC found a dealership that misrepresented a pay- ment program that claimed it would save customers money. However it failed to disclose that the significant fees it charged for the service often cancelled out any savings. Deceptive Advertising– Bait and Switch advertisements. For example the FTC found ads offering promo- tional prices and rebates, but dis- claimers in very small print eliminat- ed customers from qualifying for advertised promotional rates. The FTC targeted these specific practices it found to be deceptive:

The FTC indicated that their fraud investigators, previously assigned to

GNYADA Annual Membership Meeting

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When: Monday, June 15, 2015 Time: 10:00 am - 11:30 am Where: Old Westbury Golf & Country Club Old Westbury, New York

Join fellow dealers and allied members at GNYADA’s Annual Membership Meeting . We will report on the Association’s programs, successes, and advances this past year and what’s on tap for the coming year. New Directors and Officers will be installed at the meeting. Come network with other dealers, our sponsors and with industry suppliers, who will be present for a mini-trade show.

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

The Newsletter • April 2015

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