• by Richard Whitman , Columnist, December 14, 2014

The Federal Trade Commission is taking action against two auto dealer groups and one ad agency for violating FTC guidelines that  prohibit deceptive advertising related to the cost of buying or leasing a car.

According to the complaint against one dealer group, Billion Auto and its ad agency, Nichols Media, Inc., the dealerships and advertising company violated a 2012 FTC administrative order by frequently focusing on only a few attractive terms in their ads while hiding others in fine print (gee, no car dealer ever does that!), using distracting visuals or with rapid-fire audio delivery (a car dealer? no way!). 

For example, some dealership ads promoted low monthly payments or attractive annual percentage rates and finance periods, while concealing other material items, such as low payments were for leases, not sales; major limits existed on who could qualify for discounts; and offers often included significant added costs.

Billion Auto and Nichols Media have agreed to pay $360,000 in civil penalties to settle the FTC’s charges. Of the settlement, FTC Director Jessica Rich said, “If auto dealers make advertising claims in headlines, they can’t take them away in fine print. These actions show there is a financial cost for violating FTC orders.”