F&I and Showroom, Industry Summit 2014

Legal Federal and state enforcers are once again targeting dealership ads and dealers efforts to remain compliant continue to fall short says the magazines legal eagle By Tom Hudson I admit that Im a bit quirky Whenever I travel I try to fi nd a local paper to read at breakfast I sip my coffee and pore over the car dealership ads to see how many disclosure and unfair and deceptive acts and practices violations I can fi nd and whether dealers have found some new way to violate the advertising laws Dealership ads are a source of entertainment that beats the comics hands down Federal and state enforcers however are threatening to end my fun The Federal Trade Commission FTC s Operation Steer Clear has announced a number of advertising enforcement actions against dealers and now state attorneys general are joining the posse The latest AG to put a dealership in the crosshairs is New Jerseys On Aug 5 Acting Attorney General John J Hoffman and the New Jersey Division of Consumer Affairs announced the fi ling of a complaint against Bergen Auto Enterprises LLC doing business as Wayne Mazda and Wayne Auto Mall Hyundai for repeated deceptive advertising practices The complaint alleged that the dealerships failed to disclose to consumers that used vehicles had previously been used as rental vehicles and or had sustained signifi cant prior damage The dealerships also hadnt published statements to consumers about applicable purchase costs as required by New Jersey law The fi ve count complaint alleges that the dealerships committed multiple 70 F I and Showroom Industry Summit 2014 violations of both the Consumer Fraud Act and motor vehicle advertising regulations The state of New Jersey wants restitution for consumers and the imposition of civil penalties among other remedies The complaint also alleges that certain new vehicles offered for sale or lease had been sold months before but remained featured in the dealerships advertisements The AG claims that a 2013 Mazda advertised for lease had actually been sold almost 11 months before the advertisement was published In another instance he claimed the Hyundai dealership advertised for lease a 2013 Hyundai Genesis for at least 175 days that it did not possess and that was in fact located and titled in Pennsylvania The alleged actions of Bergen Auto Enterprises demonstrate contempt for consumers and their rights under the law said Steve Lee acting director of the Division of Consumer Affairs The Wayne Mazda and Wayne Auto Mall Hyundai dealerships allegedly offered vehicles and terms that were not attainable and concealed important details about other vehicles for sale and lease all in a calculated effort to profi t at consumers expense Newspaper advertisements for Wayne Mazda and Wayne Auto Mall Hyundai also allegedly failed to include legally required statements that explain to consumers what costs the advertised price included and what additional costs consumers were liable for The complaint also alleges that the dealerships advertised prices of new vehicles refl ecting dealership discounts and failed to properly explain the qualifi cations necessary to obtain those discounts For instance Wayne Mazda advertised prices containing a footnote that read Available to qualifi ed buyers on select vehicles And it did so without specifying the vehicle to which the discount applied or the conditions necessary for the consumer to qualify for the discount Keep in mind that so far all we have here are allegations the AG still has to convince a court that the dealerships committed the offenses they are charged with If the AGs allegations are true though I really have to wonder who at the dealerships is responsible for the legal compliance of these ads and what their advertising compliance review process looks like My bet is on nobody and nothing If that describes your dealership you need to know that the federal and state enforcers are in an absolute lather over dealership ads If your review process isnt up to snuff its time to get to work Thomas B Hudson is a partner in the fi rm of Hudson Cook LLP and the author of several widely read compliance manuals Email him at tom hudson@ bobit com CounselorLibrary com 2014 all rights reserved Based on an article from Spot Delivery Single print publication rights only to F I and Showroom HC 4831 5146 9341 8 14 Low Hanging Fruit