Two auto dealers in Las Vegas agreed to settle Federal Trade Commission 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.
In promotions by Planet Hyundai for example, 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.
Among the deceptive ads by Planet Nissan were 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 Commission’s continuing efforts to protect consumers in the auto marketplace. The FTC provides a variety of resources for consumers buying or leasing a vehicle, including Are Car Ads Taking You For A Ride?
The Commission vote to issue the administrative complaints and accept the proposed consent orders were 5-0. The agreements are subject to public comment for 30 days, beginning today and continuing through July 29, 2015, after which the Commission will decide whether to make the proposed consent orders final.
NOTE: The Commission issues administrative complaints when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues consent orders on a final basis, they carry the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000 per day.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into the Consumer Sentinel Network, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook (link is external), follow us on Twitter (link is external), and subscribe to press releases for the latest FTC news and resources.