On Friday (March 13), the Federal Trade Commission announced that it is sending warning letters to 97 auto dealership groups across the U.S. over concerns that their advertised prices don't reflect what customers actually end up paying.
Here’s what we know: The agency's baseline ask is that advertised prices include all mandatory fees, except for government-required charges such as taxes.
More specifically, the letters cite six examples of conduct the FTC considers illegal.
The aforementioned red flags include:
Advertising a price that doesn't include all required fees
Advertising a price based on rebates or discounts not everyone qualifies for
Leaving out a required additional down payment from the advertised price
Making the advertised price contingent on the buyer using dealer financing
Requiring customers to purchase add-ons that aren't reflected in the advertised price
Advertising vehicles that aren't actually available
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Between the lines: The FTC’s notice highlighted three active enforcement cases as examples of where things went wrong.
Lindsay Chevrolet, Leader Automotive Group, and Asbury Automotive Group were named in the active cases.
The allegations against those groups included dealers refusing to honor advertised prices, falsely telling customers they had to use dealer financing, charging for pre-installed products without disclosing them, and inflating prices through undisclosed add-ons.
In this case, though: The letters do not mean any specific dealer is being accused of wrongdoing as it stands.
Instead, the FTC was clear that the letters are just a signal that the agency is watching, has active cases to back it up, and will act again if warranted.
Going forward: Even though a warning letter isn't a lawsuit and doesn't carry an immediate penalty, it does put recipients on record.
And if the FTC follows up and finds the same issues still in place, claiming ignorance of the expectations becomes a much harder argument to make.
This is a developing story. Please check back for updates.
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