2 Dealers Accused of False Advertising Settle With FTC
September 03, 2013
COCKEYSVILLE, Md. and CLEVELAND — Two car dealers from Maryland and Ohio have settled with the Federal Trade Commission (FTC) after being accused of falsely advertising the cost or available discounts for their vehicles.
The settlements, part of the FTC’s continuing crackdown on deceptive motor vehicle dealer practices, prohibit the dealers from advertising discounts or prices unless the ads clearly disclose any qualifications or restrictions.
The FTC charged that Timonium Chrysler Inc., Cockeysville, Md., violated the FTC Act by advertising discounts and prices that were not available to a typical consumer. Cleveland’s Ganley Ford West Inc. also was charged with misrepresenting that vehicles were available at a specific dealer discount, when in fact the discounts only applied to specific, and more expensive, models of the advertised vehicles.
“Buying a car is a huge financial commitment, and people often calculate what they can pay down to the penny,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “They should be able to depend on the dealers to provide truthful information, and they can depend on the FTC to enforce consumer protection laws on the lot.”
Timonium Chrysler’s website touted specific “dealer discounts” and “Internet prices,” but allegedly failed to disclose adequately that consumers would need to qualify for a series of smaller rebates not generally available to them. The complaint further alleges that, in many instances, even if a consumer qualified for all the rebates, the cost of the vehicle was still greater than the advertised price.
Ganley Ford advertised its discounted vehicles on its website and in local newspapers, and it allegedly failed to disclose that its advertised discounts generally only applied to more expensive versions of the vehicles advertised.
The proposed orders settling the FTC's charges against Timonium Chrysler and Ganley Ford are designed to prevent them from engaging in similar deceptive advertising practices in the future. The two auto dealers cannot advertise prices or discounts unless accompanied by clear disclosures of any required qualifications or restrictions. The auto dealers are also barred from misrepresenting:
- the existence or amount of any discount, rebate, bonus, incentive, or price;
- the existence, price, value, coverage, or features of any product or service associated with the motor vehicle purchase;
- the number of vehicles available at particular prices; or
- any other material fact about the price, sale, financing, or leasing of motor vehicles.
The dealers must maintain and make available copies of all advertisements and promotional materials to the Commission for inspection upon request for the next five years, and they are required to comply with the FTC’s order for 20 years.