WASHINGTON — Two auto dealers in Las Vegas agreed to settle Federal Trade Commission (FTC) charges they used deceptive ads to promote the sale or leasing of their vehicles, including advertising heavily discounted prices that were not generally available to consumers.
According to the complaints, TC Dealership, L.P., doing business as Planet Hyundai; and JS Autoworld, Inc., doing business as Planet Nissan; violated the FTC Act by running ads that misrepresented the purchase price or leasing offers of their vehicles and the amount due at signing. Their ads also violated the Consumer Leasing Act (CLA) and the Truth in Lending Act (TILA) by failing to disclose required lease terms and other credit information.
For example, in promotions by Planet Hyundai, the FTC charged that the dealership misled consumers by prominently advertising a vehicle price for “$0 down available,” and then in fine print noted that consumers must turn in a vehicle with a trade-in value of at least $2,500. The dealership also failed to disclose other information in its ads such as whether or not a security deposit was required.
Planet Nissan produced deceptive ads with prominent offers for “Purchase! Not a lease!” when in fact, many of the offers were for leases. Ads by the dealership also failed to disclose the amount of a down payment required, and the terms of repayment.
As part of the proposed consent orders, the dealerships are prohibited from misrepresenting the cost to purchase or lease a vehicle and are required to comply with CLA and Regulation M and TILA and Regulation Z.
These cases are part of the FTC’s continuing efforts to protect consumers in the auto marketplace, such as Operation Ruse Control and Operation Steer Clear. The regulator voted 5-0 to issue the administrative complaints and accept the proposed consent orders. The agreements are subject to public comment for 30 days, beginning June 29 and continuing through July 29, 2015, after which the FTC will decide whether to make the proposed consent orders final.