AVENTURA, Fla., and WASHINGTON, D.C. -

A Florida law firm that specializes in legal services for dealerships offered clarification following two dealers from Maryland and Ohio agreeing to settle the Federal Trade Commission’s charges that they falsely advertised the cost or available discounts for their vehicles.

Regulators said that the settlements — part of what they called the FTC’s continuing crackdown on deceptive dealer practices — prohibit these dealers from advertising discounts or prices unless the ads clearly disclose any qualifications or restrictions.

This week, the FTC charged that Timonium Chrysler, of Cockeysville, Md., violated the FTC Act by advertising discounts and prices that were not available to a typical consumer.

Officials said Ganley Ford West in Cleveland also was 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.

Kurkin Brandes, a firm with Sunshine State offices near Miami and Tallahassee, explained the FTC made clear its position on its requirements for “clear and conspicuous” disclosures. The firm indicated the agreements stipulate five requirements, including:

—In a print advertisement, the disclosure shall be in a type size, location, and print that contrasts with the background against which it appears, sufficient for an ordinary consumer to notice, read, and comprehend it.

—In an electronic medium, an audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. A video disclosure shall be of a size and shade and appear on the screen for a duration, and in a location, sufficient for an ordinary consumer to read and comprehend it.

—In a television or video advertisement, an audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. A video disclosure shall be of a size and shade, and appear on the screen for a duration, and in a location, sufficient for an ordinary consumer to read and comprehend it.

—In a radio advertisement, the disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it.

—In all advertisements, the disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or promotion.

Brandes pointed out the agreements also identify the FTC’s position regarding bonuses and rebates that are not generally available to all. 

The firm noted the agreement provides that the dealer may not represent that a discount, rebate, bonus, incentive or price is available unless the representation clearly and conspicuously discloses any material qualifications or restrictions, including but not limited to qualifications or restrictions on:

—A consumer’s ability to obtain the discount, rebate, bonus, incentive, or price

—And the vehicles available at the discount, rebate, bonus, incentive, or price

“This should serve as a reminder that private causes of action are not the only consequence of advertising miscues or over aggressiveness,” Brandes said.

The FTC reiterated the proposed orders settling the agency’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 dealers cannot advertise prices or discounts unless accompanied by clear disclosures of any required qualifications or restrictions.

Officials added the dealers must maintain and make available copies of all advertisements and promotional materials to the FTC for inspection upon request for the next five years, and they are required to comply with the commission’s order for 20 years.

“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.”

Rich also explained 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,” Rich said.

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 through Oct. 3 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,” officials said.

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