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Auto dealers pay for violating FTC order

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Some businesses seem to have short memories. Case in point: In 2012, Billion Auto, a chain of family-owned auto dealerships, agreed to an FTC settlement order that required them not to run deceptive ads for the financing and leasing of their vehicles. Yet here we are again, reminding Billion Auto — this time with a financial penalty of $360,000 — of their responsibilities under the law.

According to the current complaint, the Billion dealerships, and a family-controlled advertising company, violated the 2012 FTC consent order by frequently focusing on only a few attractive terms in their ads — and hiding others. For example, some dealership ads promoted low monthly payments or attractive annual percentage rates and finance periods, while concealing other material items:

  • low payments were only for leases, not sales;
  • there were major limits on who could qualify for discounts;
  • the offers included significant added costs.

According to the FTC’s complaint, the dealerships failed to follow the disclosure requirements of the Truth In Lending Act (TILA), and the Consumer Leasing Act, also in violation of the 2012 FTC consent order. Billion’s ads often used fine-print type, distracting visuals or sounds, and short bursts to obscure required disclosures.

And then there’s Ramey Motors, a smaller chain of dealerships, which the FTC says violated a similar 2012 FTC consent order that prohibited them from misrepresenting the costs and terms of vehicle finance and lease offers and failing to make required credit disclosures. According to the 2014 complaint , Ramey Motors hid important information in its ads and did not clearly and conspicuously disclose required TILA information. The FTC has asked a federal court to require Ramey Motors to pay a financial penalty.

To avoid spinning your wheels when you shop for a car, check out Are Car Ads Taking You for a Ride? You’ll learn how to recognize what may be missing from an ad and the questions to ask a dealer. The answers should help you determine whether the special promotions offer genuine value — or are simply smoke and mirrors.


Blog Topics: 
Money & Credit


This is standard operating procedure among most dealers.

Yes it sound and feels very familiar. I don't think they should have been saved.

Yes, I beleive it, two car loans paid never missed a payment still had to pay a high percentage rate on my third car loan doesn't seem right to me

Who trusts used car salesmen? Or car dealers in general, for that matter anyway? Any business dependent on the haggle is ripe for dishonest and deceptive practices. The salesmen are pitted against each other and depend on internal kickbacks from the back-end of the dealership to cover meager or lost sales bonuses and are lucky to get a $100 commission per car sold. And the dealer's invoice is not what was actually paid for the car, especially when the trade-in is really $300 or less and anything you get over that was moved from the sales price or some other accounting gimmick. The FTC should mandate some pricing and disclosure standard to enforce fair trade practices the consumer can count and outlaw the "haggle" it is a license to steal and/or evade all kinds of taxes.

Fantastic article its about time we make a statement of this sort of behavior, its a shame that some people seek to exploit other people in order to obtain there happiness and freedom its great that some people don't take this lying down. Awesome stuff guys this gives us hope.

Yes then they don't tell if there's problems or interested rates

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