The Federal Trade Commission (FTC) sent letters to 97 auto dealership groups across the United States, warning them against deceptive pricing of products, the agency said in a March 13 statement.
The letters warn dealerships that “the prices they advertise must be the total price,” the statement said. “The letters encourage dealers to review their advertising and pricing practices, including ensuring advertised prices include all fees consumers will be required to pay when buying a vehicle,” the statement said.
“At a minimum, this includes evaluating advertised prices to ensure they match actual prices charged to consumers. The FTC will continue to monitor the marketplace, the letters state, and will take additional action as warranted to ensure compliance with the FTC Act and other rules the Commission enforces.”
Names of the 97 companies were not mentioned in the FTC statement. In a template letter, the FTC reminded dealers that deceptive pricing tactics not only harm customers but also competition by making it harder for law-abiding businesses to “compete on an even playing field.”
Advertising a price that does not reflect all required fees, fails to take into account downpayments, and shows rebates or discounts unavailable to customers are all considered illegal pricing practices, the letter said.
Requiring buyers to purchase additional items not shown in the advertised price, offering the advertised price to consumers only if they use dealer financing, and advertising nonexistent or unavailable vehicles are also illegal.
The agency reminded dealers to comply with federal laws, including Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in commerce.
In its statement, the FTC said the letters were part of broader efforts to ensure pricing transparency across various sectors, including ticketing and hotels, rental housing, and grocery and delivery services.
“The Trump-Vance FTC is committed to preventing auto dealers from misleading consumers with low advertised prices and then adding on mandatory fees at the end of the purchasing process,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection.
“The FTC will remain focused on monitoring auto dealerships to ensure that the market functions efficiently and competitors are transparently competing on price.”
In a March 13 statement responding to the FTC letters, the National Automobile Dealers Association (NADA) said that most dealers are law-abiding.
“While the overwhelming majority of America’s 17,000+ dealers service their customers in a consumer-friendly and compliant manner, NADA takes any potential advertising violations in the marketplace very seriously. We will continue to work with the FTC to address areas of concern,” the group said.
The National Independent Automobile Dealers Association (NIADA) said in a March 13 post on Facebook that compliance with regulations is not just a legal obligation but also an important step in building trust with customers.
“Prior to the issuance of these letters, staff from NIADA spoke with FTC officials about the agency’s concerns. Those officials made clear that misleading or deceptive pricing practices by automobile dealers are unacceptable conduct,” the association said.
NIADA encouraged dealerships receiving the FTC letters to take “immediate steps to ensure that your advertising and pricing practices comply with the law. It is also a good reason to conduct a full audit of your entire compliance program and update any other areas that could be problematic.”
In its statement, the FTC highlighted various lawsuits the agency has initiated against the auto industry to address deceptive pricing practices.
One of the lawsuits involves the FTC and the Maryland Attorney General charging Lindsay Automotive Group with “systematically deceiving and overcharging” customers for years.
Another complaint involves automotive dealer group Asbury Automotive, which was accused of “systematically charging consumers for costly add-on items they did not agree to or were falsely told were required as part of their purchase,” the FTC said.
Actions against these companies are pending, the FTC said in the recent statement.
The Epoch Times reached out to Lindsay Automotive Group and Asbury Automotive for comments, but did not receive a response by publication time.
