- Dealerships face fines exceeding $50,000 for misleading pricing practices.
- Some retailers are under scrutiny for ads that exclude required down payments.
- One dealer group recently paid $800,000 in penalties tied to its pricing.
The Federal Trade Commission is turning up the pressure on car dealerships nationwide, targeting a range of illegal practices that have long frustrated buyers. Chief among them are listings for vehicles that aren’t actually available, along with advertised prices that quietly exclude mandatory fees.
The agency’s Bureau of Consumer Protection, led by Christopher Mufarrige, recently sent warning letters to 97 dealerships across the country. The message is direct. Regulators believe some stores may be using “deceptive tactics” that fall under a list of six illegal pricing practices that have become stubbornly common across the industry.
Read: Feds Warn Nearly 100 Auto Dealer Groups To Cut It Out With Hidden Fees Or Else
Among these are advertising prices that don’t include all fees, prices with rebates not available to all customers, and prices that don’t mention an additional down payment. Additionally, some dealers are in hot water for prices contingent on using dealer financing, and on requirements to buy additional items.
In addition, dealerships can be found advertising unavailable or nonexistent vehicles, usually due to failure to take down listings in a timely fashion. Violations can result in fines of more than $50,000 and customer restitution.
Remove Listings, Or Pay The Price
The FTC has failed to specify how quickly listings should be removed, but the co-CEO of ComplyAuto, Chris Cleveland, told Auto News that dealers could update vehicle listings to say they accurately reflect inventory as of the last timestamped inventory update. Many large dealership groups use software to update listings automatically, but others still rely on manual updates or removals.
Earlier this month, Swickard Auto Group agreed to pay an $800,000 penalty and accept a $200,000 suspended penalty after allegations from the Alaska Department of Law over unfair or deceptive practices. The dealer advertised models that were unavailable and refused to sell vehicles at the advertised prices.
