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FTC Flags Auto Dealers For Fine Print - Multichannel

FTC Flags Auto Dealers For Fine Print

Takes Action Against Allegedly Deceptive Car Ads
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The Federal Trade Commission is taking action against two auto dealerships and an ad agency for deceptive car ads, including fast-talking TV spots.

In one case Billion Auto, a chain of family-owned dealerships in Iowa, Montana and South Dakota, and its co-owned ad agency, Nichols Media, have agreed to pay $360,000 in civil penalties to settle FTC charges that it violated a 2012 order prohibiting them from "focusing on only a few attractive terms in their ads while hiding others in fine print, through distracting visuals, or with rapid-fire audio delivery."

“If auto dealers make advertising claims in headlines, they can’t take them away in fine print,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in announcing the actions. “These actions show there is a financial cost for violating FTC orders.”

The FTC said Billion and Nichols had agreed in the 2012 order not to "misrepresent material costs and terms of vehicle finance and lease offers." The order also required specific disclosures.

In a separate action, the FTC has charged Ramey Motors and three dealerships in Virginia and West Virginia with similar violations of a similar 2012 order.

The votes to take the actions were both 5-0. No media were cited for their role, but earlier this year, in settling with nine car dealerships over deceptive ads with confusing fine print, an FCC official told Multichannel News that media outlets, including TV stations, should be on the lookout for the "red flag" of fine print that is inconsistent with the banner headline offer. The official said that those media outlets should look at the fine print in dealer adds and if it is unreadable to them, it will be unreadable to consumers, particularly in the case of TV ads.

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