FTC Targets Auto Financing Ads in ‘Operation Steer Clear’
The Federal Trade Commission said nine auto dealers had agreed to settle deceptive advertising charges ― and the agency plans to take action against a 10th dealer ― in a false advertising sweep focused on the sale, leasing, and financing of automobiles.
Calling the action “Operation Steer Clear,” the FTC said in a release that the complaints stem from accusations that dealers were deceptive in their print, internet, and video advertisements. The complaints said the dealers led consumers to believe they could buy cars for low prices and finance them with low monthly payments.
Among the charges:
• In California and Illinois, dealers violated the FTC Act by deceptively advertising that consumers could pay $0 up front to lease a vehicle when, in fact, the advertised amounts excluded substantial fees and other amounts. The ads also allegedly violated the Consumer Leasing Act and Regulation M by failing to disclose certain lease-related terms.
• Georgia and North Carolina dealers deceptively advertised that consumers could finance vehicle purchases with low monthly payments when, in fact, the payments were temporary “teasers” after which consumers would owe a different amount.
• In Texas, a dealer advertised that consumers could purchase a vehicle for specific low monthly payments when, in fact, consumers would owe a final balloon payment of more than $10,000. The companies also allegedly advertised that consumers could drive home a vehicle for specific low up-front amounts and low monthly payments when, in fact, the deal was a lease and they would owe substantially more at the outset.
