The Federal Trade Commission announced it has reached a compliance agreement with one of the 97 car dealers that received a warning letter in March.
Driving the news: The FTC Thursday announced it reached an agreement with Greenway Auto Group in Orlando and four of its Kia dealerships and one Hyundai dealership, on an order filed in the U.S. District Court for the Middle District of Florida.
Greenway agreed to follow the FTC’s requirements for price transparency by disclosing the total price of any vehicle “clearly and conspicuously” as the most prominent item on any “visual” disclosure or ad.
Only government fees may be excluded from the total price.
The dealership must also retain records for five years, including ads, worksheets to pencil any deals, and written communications.
But as part of the settlement, Greenway “neither admit or deny” any of the allegations by the FTC.
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FTC’s complaint: The FTC’s complaint alleged the dealer charged consumers more than $3,350 more than the advertised price in more than 90% of transactions.
The alleged charges included administrative, dealer, delivery, and processing fees.
The agency also accused the dealer of advertising conditional rebates and discounts for subsets of consumers, as well as luring customers to the dealership with mailers offering prizes that were not real.
Additionally, the FTC claimed that after receiving the March warning letter, the dealer added “false assurance of price transparency” to its websites and continued to advertise vehicles for less than the actual price.
What they’re saying: “Truthful advertising in the auto industry is vital because purchasing a car is one of the most significant financial decisions consumers make,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection in a press release. “Consumers can’t make informed choices when the actual price is hidden. Price transparency is critical to a properly functioning market and is a top priority for the Trump FTC.”
Bottom line: The FTC has been clear about its expectations on advertising the total price and recently published its FAQs. As this case shows, there’s rising pressure on dealers to make sure they’re in compliance to avoid potential penalties and damage to their reputation.
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