LOS ANGELES -

The Federal Trade Commission included a total of 10 dealers in a nationwide regulatory sweep focusing on advertising the sale, financing and leasing of vehicles.

On Thursday, the FTC announced nine dealers agreed to settle deceptive advertising charges, and the agency is taking action against a 10th dealer that is still being litigated.

According to the complaints, the dealers allegedly made a variety of misrepresentations in print, Internet and video advertisements that violated the FTC Act, falsely leading consumers to believe they could purchase vehicles for low prices, finance vehicles with low monthly payments, and/or make no upfront payment  to lease vehicles.

The agency said one dealer misrepresented that consumers had won prizes they could collect at the store.

The dealerships that settled charged included:

California

Casino Auto Sales of La Puente, Calif., and Rainbow Auto Sales, of South Gate, Calif., allegedly violated the FTC Act by deceptively advertising that consumers could purchase vehicles at specific low prices when, in fact, the price was $5,000 higher. Both dealers’ ads involved a mix of English and Spanish. Honda of Hollywood, Los Angeles, and Norm Reeves Honda of Cerritos, Calif., 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 (CLA) and Regulation M, by failing to disclose certain lease related terms. Norm Reeves Honda’s ads also allegedly violated the Truth in Lending Act (TILA) and Regulation Z, by failing to disclose certain credit related terms.

Georgia

Nissan of South Atlanta of Morrow, Ga., allegedly violated the FTC Act by deceptively advertising that consumers could finance a vehicle purchase with low monthly payments when, in fact, the payments were temporary “teasers” after which consumers would owe a different amount. The ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.

Illinois

Infiniti of Clarendon Hills of Clarendon Hills, Ill., allegedly 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 CLA and Regulation M, by failing to disclose certain lease related terms.

North Carolina

Paramount Kia of Hickory, N.C., allegedly violated the FTC Act by deceptively advertising that consumers could finance a purchase with low monthly payments when, in fact, the payments were temporary “teasers” after which the consumer would owe a much higher amount, by several hundred dollars. The ads also allegedly violated the TILA and Regulation Z, by failing to clearly and conspicuously disclose certain credit related terms.

Michigan

Fowlerville Ford of Fowlerville, Mich., allegedly violated the FTC Act by sending mailers that deceptively claimed consumers had won a sweepstakes prize, when, in fact, they had not. Some of their ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.

Texas

Southwest Kia companies, including New World Auto Imports, Dallas, New World Auto Imports of Rockwall, Rockwall, and Hampton Two Auto Corporations, Mesquite, allegedly violated the FTC Act by deceptively advertising that consumers could purchase a vehicle for specific low monthly payments when, in fact, consumers would owe a final balloon payment of over $10,000. The companies also allegedly deceptively 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 up-front. The ads also allegedly violated the CLA and Regulation M, by failing to disclose certain lease related terms, and the TILA and Regulation Z, by failing to disclose certain credit related terms.

In addition, the FTC issued an administrative complaint against Courtesy Auto Group of Attleboro, Mass. The FTC alleges the dealership violated the FTC Act by deceptively advertising that consumers can lease a vehicle for $0 down and specific monthly payments when, in fact, the advertised amounts exclude substantial fees. The ads also allegedly violate the CLA and Regulation M, by failing to disclose or clearly and conspicuously disclose certain lease related terms.

Speaking from Los Angeles, the FTC’s Jessica Rich explained the proposed consent orders settling the FTC’s charges in the nine cases are designed to prevent the dealerships from engaging in similar deceptive advertising practices in the future.

The director of the FTC’s Bureau of Consumer Protection went on to note the orders prohibit the dealerships from misrepresenting in any advertisement for the purchase, financing or leasing of vehicles, the cost of leasing a vehicle, the cost of purchasing a vehicle with financing, or any other material fact about the price, sale, financing or leasing of a vehicle.

When relevant, Rich said, the proposed consent orders also address the alleged TILA and CLA violations by requiring the dealerships to clearly and conspicuously disclose terms required by these credit and lease laws.

In the case where the dealerships misrepresented that consumers had won a prize, the proposed order also prohibits misrepresenting material terms of any prize, sweepstakes, giveaway, or other incentive, according to the FTC official.

“The bottom line is this: When you’re buying or leasing a car, you need to have the facts, facts that inform, facts that let you shop with confidence,” Rich said. “What don’t you need? Deceptive tricks and tactics.

“Buying a car is a big deal. It’s an important and complex financial transaction. With so much on the line, consumers have enough to think about. They shouldn’t have to worry about dealers who are flattering the law by making deceptive claims,” she continued.

“If you’re a car dealer who depends on fleeting disclaimers and small print to try to cover up your prominent misrepresentations, stop. It’s a bad way to do business and it’s against the law,” Rich went on to say.

The FTC files a 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. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be.

Rich refused to divulge the specific timeline of the FTC investigation that resulted in these developments, but acknowledged “the violations we challenged were ongoing and quite recent.”