Operators now have a clear guide on how to avoid getting into trouble with the Federal Trade Commission.
Cindy Liebes, director of the FTC’s Southeast region, shared what she deemed to be the “seven deadly advertising sins” buy-here, pay-here dealers commit that place them in the center of her regulatory radar.
“No doubt, one of the FTC’s top priorities is protecting consumers in the auto marketplace. However, I’ve also heard from many honest dealers saying they can’t compete with the dealer down the street who doesn’t follow the rules,” Liebes said.
“Regulatory actions against unscrupulous dealers promote fair competition, which is good for any industry and protects the players trying to do the right thing,” she continued.
Liebes will discuss more about compliant advertising and auto financing on the second day of Innovate: The Independent Dealer Industry Conference, hosted by DealerSocket starting on Sunday in Fort Worth, Texas.
Liebes will outline lessons for dealers learned from Operation Ruse Control, an initiative she led where the FTC partnered with 32 other governmental agencies. The regulatory project resulted in 252 enforcement actions against dealers nationwide.
Ahead of her keynote, Liebes shared a list of seven deadly advertising sins, all of which draw suspicion from regulators.
“While I can’t speak about current non-public investigations, it’s important for dealers to know that the FTC is committed to bringing law enforcement actions in the auto industry,” Liebes said. “We don’t pay attention to the size of a dealer either. Big and small stores need to get their house in order.”
According to Liebes, dealers’ violations include:
1. Twisting the facts about add-ons
For example, the FTC recapped a California-based company deceptively claimed in online ads and through a network of authorized dealers that vehicle buyers who purchased its biweekly payment program would save money. Consumers weren’t told that the cost of the add-on often outstripped any savings. This case resulted in a $2.475 million settlement of refunds and fee waivers.
2. Lowballing your pitch
The FTC indicated several dealers recently “crossed the line” by using headlines to tout bargain prices while failing to adequately disclose the true cost of the deal. For example, one Florida dealership pitched “used cars as low as $99.”
But $99 was just the minimum bid for vehicles offered at a liquidation sale, and that didn’t include substantial mandatory fees. The ads also included photos of loaded cars without clearly explaining that some pictures featured — like spoilers and sunroofs — weren’t included in the price.
3. Luring customers with misleading “zero” promises
The regulator explained one California dealer’s deceptive use of zero promised “$0 initial payment, $0 down payment, $0 drive-off lease.” Another ad promised “$0 down, 0 percent APR financing, 0 payments and 0 problems.” But consumers had to pay much more up-front to lease or purchase the cars. And “0 percent APR?” The annual percentage rate for financing those vehicles for the advertised payment was way more than zero percent.
4. Hiding the strings attached to a deal
The FTC mentioned an Alabama dealership highlighted eye-catching prices without clearly explaining what the vehicle would really cost consumers. In some cases, ads featured prices that factored in special discounts or rebates that weren’t available to everyone. For example, some prices applied only to recent college graduates, a restriction not prominently disclosed.
5. Burying key disclaimers in fine print
The regulator pointed out the fine-print footnotes, unclear “disclaimers” that consumers must scroll down to see, or other buried information won’t live up to the FTC’s “clear and conspicuous” standard. Advertisers often ask how big a disclosure must be, but it’s more than a matter of font size. A clear and conspicuous disclosure is one sufficient for consumers to actually notice, read and understand.
6. Ignoring applicable credit laws
The FTC noted one common pothole is using certain “triggering terms” under the Consumer Leasing Act, Truth in Lending Act, Reg Z or Reg M without making required disclosures. For example, if operators advertise monthly lease payments, that kicks in a requirement under the Consumer Leasing Act that you disclose other facts about the transaction — like the total amount due at lease signing; whether a security deposit is required; and the number, amount and timing of scheduled payments.
7. Violating prior orders
The FTC may seek monetary civil penalties for violations of prior FTC administrative orders. For example, the FTC recently brought two actions alleging violations of administrative orders, which prohibited dealers from deceptively advertising the cost of buying or leasing a car. One action resulted in the dealer group paying a hefty civil penalty, and the other action is pending. These actions show that there can be a financial cost for violating FTC orders.
To get more detailed, real-world knowledge on BHPH compliance, operators can join Liebes and other legal experts at Innovate: The Independent Dealer Industry Conference. The show will feature more than 80 different classes — all more than one hour long — that dive deep into compliance, technology, collections, finance, accounting, operations and more.
“In total, attendees will access more than $10,000 in legal insight for the price of admission,” organizers said.
DealerSocket expects more than 600 attendees at this year’s conference, including major exhibitors and financial institutions that will showcase the latest dealership technology, best practices and industry solutions.
To view the full schedule or buy tickets, visit www.MyInnovate2015.com.
В интеренете нашел важный сайт , он описывает в статьях про Продать овес в Луганской области agroxy.com