Pub. 56 2015-2016 Issue 1

33 FALL 2015 an ordinary consumer to notice, read, and comprehend it. Electronic medium: An audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. Video or streaming video: A disclosure shall be of a size and shade and appear on the screen for a duration and in a location for an ordinary consumer to read and comprehend it. In a television or video advertisement, an audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. Radio or streaming audio: The disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. Interactive Media (Internet, online services and software): The necessary disclosures must be presented as required for print or text–see above, in addition to any audio or video presentation. In any advertisement, the disclosure must be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or promotion. 19 A “$0 Down, $0 Payments, and $0 Interest” advertisement was not available to any consumer because the motor vehicle was not free. In this instance, a consumer was required to make a down payment or provide an equivalent trade in order to obtain the vehicle. In addition, monthly payments and fees were required. 20 Advertising “$0 Down to Lease” when any amount is required to be paid to drive out, including state fees or taxes, is deceptive. 21 Similarly, advertising a lowmonthly payment without disclosing a final balloon payment is due at the end of the lease is deceptive. 22 In another complaint, a Spanish lease advertisement promoted a Sign and Drive Event with “$0 Initial Payment, $0 Down, and $0 on Lease Signing.” The advertisement offered three vehicles on approved credit requiring amounts ranging from $4100 to $5400 plus registration and taxes to be paid on lease signing–more than the $0 down advertised. 23 Advertising remains in the agency’s sites. In 1983, the FTC Chairman, James C. Miller III, issued a Policy Statement 24 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. Buyers Guide The FTC issued its final rule on the Used Car Buyers Guide in 1981, requiring dealers to post on used vehicles offered for sale to consumers, information about the warranty coverage offered and the meaning of an “as is” sale as well as certain known mechanical condition defects. 25 Proposed amendments to the rule this year will require a dealer to disclose on the Buyers Guide whether a vehicle history report has been obtained on a vehicle and to provide a copy of the report to any consumer who requests a copy. 26 Throughout the last thirty plus years, dealers have been cited for failure to post and complete the required Buyers Guide. In June of this year, a $90,000 civil penalty was agreed to for failure to properly complete and display a Buyers Guide on used vehicles offered for sale. 27 The Order permanently restrains and enjoins the defendant from: 1. Misrepresenting any material fact, expressly or by implica- tion, including, but not limited to: A. The mechanical condition of a used vehicle; B. The terms of any warranty offered in connection with the sale of a used vehicle; and, C. That a used vehicle is sold with a warranty when the vehicle is sold without any warranty. 2. Failing to disclose the material terms and conditions of any offer, including, but not limited to: A. Prior to sale, that a used vehicle is sold without any warranty, if no warranty is offered; and, B. Prior to sale, the terms of any written warranty offered in connection with the sale of a used vehicle. 3. Before offering a used vehicle for sale to a consumer, failing to display a properly completed Buyers Guide, prominently and conspicuously in any location on that used vehicle and in such a fashion that both sides are readily readable. 4. Failing to provide the used vehicle buyer with a properly completed Buyers Guide containing all of the disclosures required by the Used Car Rule and reflecting the warranty coverage agreed upon. 5. Failing to include the following statement in each contract for sale of a used vehicle to a consumer: “The information you see on the window form for this vehicle is part of this contract. Information on theWindow Form overrides any contrary provisions in the contract of sale.” 6. For a sale conducted in Spanish: A. Failing to provide, inSpanish, the used vehicle buyer a properly completed Buyers Guide containing all of the required disclosures and reflecting the agreed upon warranty coverage; and, B. Failing to include the following statement in each contract for the sale of a used vehicle to a consumer: “La información que ve en el formulario de ventana para este vehículo es parte del contrato. Información en el formulario de ventana anula cualquier dis- posición contraria en el contrato de venta.” Remember that for required posting of a the Buyers Guide, a “used vehicle” is any vehicle driven more than the limited use necessary in moving or road testing a new vehicle prior to delivery to a consumer, but it does not include a vehicle sold for scrap or parts. This definition requires a demonstrator to have a Buyers Guide completed on it. 28 FTC Roundtables In 2011, the FTC hosted a series of roundtable discussions to “explore consumer protection issues pertaining to motor vehicle sales and leasing.” 29 The roundtables grew out of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) 30 signed by President Obama on July 21, 2010, authorizing the FTC to prescribe rules under Section 553 with respect to  FTC — CONTINUED ON PAGE 35