On June 29, the Federal Trade Commission announced that it had reached settlements with two Las Vegas auto dealerships, Planet Hyundai and Planet Nissan, over claims that they violated the Federal Trade Commission Act of 1914 by advertising large discounts not available to the general public.
The allegations against Planet Hyundai and Planet Nissan involved similar misleading advertisements in which big, bold claims such as “$0 DOWN AVAILABLE” or “PURCHASE! NOT A LEASE!” were paired with asterisks and small fine print that was contradictory, disingenuous, and/or only applicable to a small segment of the population. Additionally, the dealerships were targeted for allegedly misleading by omission, such as failing to disclose whether a security deposit was required.
No penalties were imposed on either company, and there were no public admissions of wrongdoing, but both dealerships signed consent orders placing the dealerships under heightened scrutiny for twenty years and imposing hefty fines for future violations. The FTC unanimously approved the consent orders with a 5-0 vote, and there will be a thirty-day public comment period on the proposed settlements before they are finalized.
At a press briefing last year, FTC Bureau of Consumer Protection Director Jessica Rich stated, “Dealers think that if they put the real price of something in really fine print, that’s not deceptive. That is deceptive, and it violates the law.” From January through March 2014, the FTC announced settlements with ten dealerships throughout the country as part of “Operation Steer Clear,” which involved similar allegations. Although the two Las Vegas settlements were not part of that operation, they demonstrate a continued focus by the FTC on auto dealership advertising practices.