On March 13, the FTC sent warning letters to 97 dealer groups nationwide over concerns that their advertised prices don't reflect what customers actually end up paying.
Since then, we've covered what those letters said and how dealers and industry groups responded.
And most recently: We had Adam Crowell, chief legal and strategy officer at KPA, and Barrett Beatty, partner at Charapp & Weiss, LLP, on Daily Dealer Live in separate segments to each break down what dealers should actually do about them.
Both advise dealers on compliance regularly.
And asked independently by host Sam D'Arc for their single most important fix, they each individually landed on the same answer: get your doc fee and freight back into your advertised price.
“It's an easy, easy catch,” Beatty told D’Arc. “They can go right on your website after someone's complained.”
In his segment, Crowell said the same thing, with both noting that the federal standard applies regardless of what state law allows.
Beatty even pointed to an active FTC case brought against a Virginia dealer over a processing fee that Virginia law explicitly permitted.
That case is still moving forward under federal authority.
"Whatever's on your online price should be your ceiling, not your floor,” Beatty added.
From there, the conversation moved to disclaimers, something both attorneys said dealers are getting wrong without realizing it.
Their argument: A disclaimer at the bottom of a page that says a market adjustment may apply does little to protect the store, but it does document that the advertised price was never real.
"If there is a market adjustment, put it into your price, you gotta do it," Beatty said. "Don't put it in the bottom of your disclaimer."
Crowell took that further in his segment, noting that the FTC holds disclosures to a stricter standard than most dealers expect.
He said he's actually spoken directly with FTC attorneys about it, and that if a customer has to scroll to find the fine print, the agency does not consider it adequate disclosure.
“They think that's an unfair and deceptive practice," he said.
Between the lines: With 97 dealer groups involved, the warning letters sent by the FTC naturally raised the question of how dealers end up on the FTC's radar in the first place.
According to Crowell, it almost always starts with customer complaints, like unresolved ones filed directly with the agency or visible on review platforms.
Stores that don't have a process for engaging with complaints, he said, are more exposed than they may think.
That exposure extends beyond a dealer's own website, too.
OUTSMART THE CAR MARKET IN 5 MINUTES A WEEK
Get insights trusted by 55,000+ car dealers. Free, fast, and built for automotive leaders.
Similarly to Crowell’s point: Beatty noted that if the FTC opens a formal investigation, it subpoenas data directly from listing platforms like Cars.com and CarGurus. And if the price on those platforms doesn't match the buyer's order, that data becomes part of the record.
"They'll subpoena them for the data," she said. "Your lead providers could be your standard as to what that price was."
As for what's actually at stake: Beatty explained that the consent order is what dealers should be most concerned about, because it binds a dealership and the individuals involved for years.
She also stressed that in all four of the FTC's active auto cases, personal liability has been attached to the people who set the policies, not just the business.
"You don't wanna be under a consent order,” Beatty said, adding that “that's the worst thing that can happen with the FTC."
What we’re watching: NADA and the FTC are co-hosting a webinar on April 6 to provide further guidance on the letters. KPA and 700 Credit will host a follow-up session on April 7.
In the meantime, though, both attorneys suggest dealers make their advertised price, disclaimer language, and third-party listing accuracy their top priorities.
A quick word from our partner
What if you could protect your customers and employees while creating a new profit center?
Pulse® Protects is easy to implement, simple for your team to sell, and adds value across sales and F&I with no disruption to your process.
Shawn McCormick, COO of Apple Valley Ford, shared:
“Pulse® quickly became one of the easiest and most impactful profit centers in our store.”
Get started with a free safety analysis and four Pulse® modules installed at no cost.
