The Federal Trade Commission (FTC) continued “Operation Steer Clear” – a crackdown on deceptive advertising by automobile dealers – with a tenth settlement with a dealer accused of misrepresenting the terms of available consumer leases.

Courtesy Auto Group, Inc., a Massachusetts auto dealer, agreed to a proposed settlement with the FTC under which it would discontinue advertising practices that, according to the FTC, included advertising that a vehicle could be leased with $0 down at signing when, in fact, the dealer would charge substantial fees and costs at closing.

Courtesy also was accused of failing to include in its advertisements mandatory disclosures required by the Truth in Lending Act (TILA) and Regulation M, the regulation implementing the leasing provisions of TILA.  Under federal law, when an advertisement contains “trigger” statements about an available lease – such as a monthly payment – then the advertiser is required to include in the advertisement a basic set of other disclosures, including the amount due at delivery.

In January 2014, the FTC achieved settlements with nine dealers that were accused of similar advertising practices.

“Operation Steer Clear,” including this most recent settlement, is a very deliberate effort by the FTC to send several specific messages to auto dealers:

• That the FTC will use its powers to aggressively supervise auto dealers, particularly as related to their financing activities;
• That advertising a price without disclosure of associated charges and fees is generally viewed as a deceptive act by the FTC; and
• That nuts-and-bolts compliance with the federal consumer protection laws remains a regulatory priority with the FTC.