GNYADA September 2015 Newsletter

W.Va. Dealership to Pay 80K for Deceptive Advertising

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where consumers did have unpaid vehicle debts, dealers simply fac- tored that negative equity into the consumer's loan — one even required consumers to pay it out of pocket. The 2014 Ramey ads were found to have similarly concealed important terms, such as a required down payment — they also failed to make federally mandated credit dis- closures.

4 The NYS Attorney General’s Office is currently investigating a number of local dealerships for allegedly pub- lishing deceptive advertisements. These dealers received letters from the AG, regarding ads that purported- ly violate the Office’s Advertising Guidelines for Auto Dealers. The recently listed charges include several which the Association has reported on previously, when the NY AG accused dealers of deceptive ad practices in the past. Alleged breaches include: Confusing footnoting Parameters around down payments, such as percentage, repayment timeline, etc. Inaccurate use of the phrase “no money down” n n n Ramey Motors Inc. has agreed to an $80,000 civil penalty, for violating terms of a Federal Trade Commission consent order. In 2012, the FTC directly prohibited the deal- ership from advertising untrue costs and conditions around buying or leasing cars — The Commission found this agreement to have been violated in 2014, resulting in the recent settlement. The southern West Virginia dealer- ship was one of five, nationwide, accused of running digital ads that promised to pay off a consumer's trade-in, regardless of what that con- sumer owed on the vehicle. In cases

loan application fraud, to odometer fraud, and beyond — those dealer- ships were penalized more than $2.6 million in total, as a result. Both the FTC and the New York Attorney General’s Office are contin- uing their investigations of dealer- ship ad policies. If you have an agreement with a regulatory body which states that you’ll adhere to certain advertising practices, it’s important that you stick to them. To keep compliant, dealers should care- fully review all print and digital media advertising with their ad agencies and legal counsel.

This action dovetails with the Commission’s Operation Ruse

Control , a cross-border investigation from earlier this year, which targeted six dealerships for violations that ranged from deceptive ads, to auto

Metro Dealerships Contacted by AG

These bullets echo much of what the FTC recently provided for the September 15th F&I and Showroom eNews piece about the 7 Deadly Sins of Dealer Advertising — that article itself is an informative resource of dos and don’ts, for dealers. Dealerships have been given a deadline of September 30th, 2015, to respond to the AG’s claims. GNYADA suggests dealers review their advertising practices with their advertising agencies — if your deal- ership receives any communications from an enforcement agency, immedi- ately contact your dealership attorney, to officially respond to the inquiry. The Advertising Guidelines can be found here: http://www.ag.ny.gov/ sites/default/files/pdfs/ publications/AdGuidelines ForDealers.pdf

Exaggerated promises about customer credit considerations Maintenance responsibility for lessees Nebulous cash-rebate offers

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

The Newsletter • September 2015 3