FTC Halts Two Automobile Dealers’ Deceptive Ads

Two car dealers from Maryland and Ohio have agreed to settle the Federal Trade Commission’s charges that they falsely advertised 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., of Cockeysville, Md., violated the FTC Act by advertising discounts and prices that were not available to a typical consumer. Ganley Ford West, Inc., in Cleveland, also is 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 West 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 West 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.

Consumers in the market for a new or used vehicle should read the FTC’s Car Ads and Buying and Owning a Car.

The Commission vote to issue the administrative complaints and accept the consent agreement packages containing the proposed consent orders for public comment was 4-0. The agreement will be subject to public comment for 30 days, beginning today and continuing through October 3, 2013, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically for Timonium Chrysler and Ganley Ford West or in paper form.

Comments submitted in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, D.C., 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. 

NOTE: The Commission issues an administrative complaint 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 a consent order on a final basis, it carries 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.

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 Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.