Consumer Finance Insights
October 21, 2015

FTC Enters Consent Order with Two Las Vegas Auto Dealers for Misleading Advertisements

On October 20, the Federal Trade Commission (FTC) announced that it approved final consent orders against two Law Vegas auto dealers for misrepresenting the cost of cars in advertising, which the dealers had agreed to settle back in June (available here and here).

The complaints (available here and here) alleged that the auto dealers violated provisions of the Federal Trade Commission Act, Consumer Leasing Act and Regulation M, and Truth in Lending Act and Regulation Z.  According to the complaints, the dealers placed numerous advertisements promoting consumer leases and purchases of motor vehicles, or promoting credit sales and other extensions of closed-end credit.  These advertisements allegedly misrepresented information such as the purchase price of amount due at signing, and failed to disclose required lease and credit information.  For example, each complaint describes an advertisement that prominently states terms such as “$0% APR for 72 MONTHS**”, with a disclaimer near the bottom of the full-page newspaper advertisement in “miniscule print.”  The advertisement allegedly failed to include other required information, such as the terms of repayment.

Each auto dealer was enjoined from making misrepresentations in connection with an advertisement for the purchase or lease of a motor vehicle, and ordered to state leasing and credit information disclosures required by Regulation M and Regulation Z.  The dealers must submit a compliance report to the FTC within 60 days.