GNYADA November 2014 Newsletter

5 New Media – New Enforcement Era

Recent FTC Activity Examples A recent FTC consent order was based on an advertise- ment that read in big bold print: “2013 KIA Sportage. $0 down and $99 per month.” Buried in small faint- gray type with the background of a white and silver wheel were a series of disclosures that included noting that only the first two months were at $99—with the remaining 70 monthly payments being $521. Another dealer advertised a low vehicle price, but buried in an inconspicuous footnote was a $5,000 down payment requirement. Another deceptive advertisement listed favorable financing terms for a vehicle but failed to disclose that in order to qualify, consumers must have met numerous other criteria that few, if any, could collectively meet. This is called “rebate stacking” and the FTC considers it to be deceptive as well. n n n

Advertising – it’s no longer just TV, print, and radio spots used for promoting car sales. Now there’s a variety of social media options that weren’t even in existence when advertising laws were first drafted. As a result, the FTC has become much more active in pursuing dealers whom they perceive have practiced deceptive advertising. The FTC defines “deceptive” as any representation, omis- sion, or practice that is likely to mislead a consumer. Since 2012, the FTC has brought 16 cases against auto dealers for deceptive advertising. If the FTC determines than an advertisement is “likely to mislead,” violations can be as high as $16,000 per piece mailed or per viewing of a printed or online ad. Social Media Advertising Challenges Internet or social media advertising presents its own set of challenges. All disclosures that need to be made clearly and conspicuously in print must also be made clearly and conspicuously online. In assessing penalties for deceptive Internet or social media ads, the FTC has said the same standards for deceptive and unfair advertising apply.

GNYADA thanks Randy Henrick, Associate General Counsel and Lead Compliance Counsel for Dealertrack for his contribution to this article.

GNYADA Joins GroupWorking with NYS on Future of Electric Cars

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The Greater New York Automobile Dealers Association is working on ways to meet New York State’s man- date on zero-emission vehicles (ZEVs), which state that by 2025, 25 percent of all vehicles sold in NYS are supposed to be ZEVs. We are participating in calls and committees with state agencies to help figure out ways to help dealers meet these goals. We are part of the process in bringing new ideas to the forefront. The question remains, how-

ever, how do we sweeten the pot for consumers? We’ve called on the state to take some initiative and have put forth some ideas of our own: Point of sale tax relief; Rebates; and Tax exemptions. The State also needs to build up the infrastructure that would support these vehicles. What’s more, it needs to lead by example by customizing its own fleets by changing over to zero- emission vehicles to meet the man- n n n

date as well. A strong marketing cam- paign from the State is also needed to help educate consumers about the ZEVs and the benefits they offer. GNYADA is participating in a ZEV Multi-State Task Force that will con- tinue to work with government offi- cial on how to make the 25 percent mandate attainable and workable for dealers.

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

The Newsletter • November 2014

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