Pub. 56 2015-2016 Issue 1

32 advertisements, the advertised price did not reflect additional costs required to obtain the dealer-added features, such as a sunroof and spoiler, resulting in a consumer not being able to purchase the vehicle at the advertised price because of the dealer add-ons. 15 A “NOW” Price on a 2015 Versa S was advertised as “WAS $12,888 and NOW $9,977.” Beneath the price the dealership listed the stock number and “$1,000 Trade Assistance and $600 VPP/Active Military discount and $600 College Grad discount.” The prominently advertised price is not generally available to a buyer because the buyer must be a recent college graduate, a member of the military and trading in a vehicle in order to receive the advertised price–a violation of Section 5(a) of the FTC Act. Advertising “50% Off” for a “2014 Accent $36 /mo” with the following statement in difficult to read print: All advertised amounts include all Hyundai incentive/re- bates, dealer discounts and $2500 additional down from your trade in value. . .1.14MY Accent–*Price excludes tax, title, license, doc, and dealer fees. MSRP $18,075 - $2451 Dealer Discount–$2650 HMA rebates–$4000 Trade Allowance = Net Price $8974. Lease 36 months with $0 Cash down pay- ment. On approved credit. Must trade qualifying vehicle. . .All payment and prices include HMA College Grad Rebate, HMA Military Rebate, and HMA Valued Owner Coupon. Must be active military or spouse of same to qualify for HMA Military Rebate. Must graduate college in the next 6 months or within the last 2 years to qualify for HMA College Grad rebate. Must own currently registered Hyundai to qualify for HMA Valued Owner Coupon. 16 The prominently advertised price is not available to the buying public as a consumer must be a recent college graduate, a member of the military, and own a currently registered Hyundai or trading in a qualifying vehicle. The likelihood of any one buyer meeting all of the necessary qualifications is slight. The advertisement also fails to disclose all of the necessary disclosures when advertising a lease as well as not being “clear and conspicuous.” The clear message from the FTC is that an incentive that is not available to the typical consumer should not be included within an advertised price. Advertising Finance and Lease Offers In 2014, a chain of 20 automobile dealerships and a family- controlled advertising company agreed to settle charges that they violated a 2012 FTC administrative order regarding misrepresent- ing material costs and terms of vehicle finance and lease offers that require specific disclosures mandated by the Truth in Lending Act (TILA) and Regulation Z and the Consumer Leasing Act (CLA) and Regulation M. 17 The Complaint alleged that the dealerships and advertising company focused on a few attractive terms while hiding other terms such as who can qualify or by adding extra costs. In a television promotion, the 30-second ad featured successive im- ages of three models for lease stating “LEASE FOR $179 MO.” For three seconds at the bottom of the screen the disclosure in small size font requires a consumer to bring $2000 plus the first monthly payment in order to qualify. In addition, a consumer must also be both a returning customer loyal to the manufacturer and a military member or veteran. 18 When advertising, including the internet, a disclosure must be clear and conspicuous. Print/Text (including a computer screen or mobile device): A disclosure must be in a type, size, location, and in print that contrasts with the background sufficiently for  FTC — CONTINUED FROM PAGE 31 Advertising remains in the agency’s sites. In 1983, the FTC Chairman, James C. Miller III, issued a Policy Statement claiming that “the Commission intends to enforce the FTC Act vigorously. We will investigate, and prosecute where appropriate, acts or practices that are deceptive.” This policy continues today.