Auto Dealers Targeted for Deceptive Zero-Down Ads, Purchase 'Add-Ons' with High Fees, FTC Says

Auto Dealers Targeted for Deceptive Zero-Down Ads, Purchase Add-Ons with High Fees, FTC SaysConsumers have grown wise to those TV and print ads by auto dealers pushing “zero down” deals. They know enough to read the fine print were the real deal is usually hiding.
How about those financing and leasing “add-ons” that dealers tack onto the final contracts. In most cases, the fees add up to more than the savings purported by the dealer. 
Unfortunately, too many consumers are still victimized by these tactics, requiring federal and local agencies to intervene.
The Federal Trade Commission Thursday announced enforcement actions against several dealers across the nation in partnership with federal, state and local law enforcement.  Operation Ruse Control, a crackdown to protect consumers when purchasing or leasing a car, covered 252 enforcement actions. Six new FTC cases include more than $2.6 million in monetary judgments.
For the first time since being granted authority over auto dealers under the Dodd-Frank Act, the FTC has taken two auto-dealer actions involving add-ons, which is the practice of a dealer or other third party adding charges for other products or services to the vehicle sales, lease, or finance agreement. A few examples include extended warranties, payment programs, guaranteed automobile protection (commonly called GAP or GAP insurance), credit life insurance, road service, theft protection, and undercoating.

“For most people, buying a car is one of the largest purchases they’ll make,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Car ads must be truthful, loan terms must be clear, and dealer practices must be honest. That’s why our partners are working together to crack down on deceptive marketing about car sales, leasing and financing.”
In three deceptive advertising cases, three auto dealers — Cory Fairbanks Mazda of Longwood, Fla.; Jim Burke Nissan of Birmingham, Ala., and Ross Nissan of El Monte, Calif. — have agreed to settle charges that they ran deceptive ads that violated the FTC Act, and also violated the Truth in Lending Act (TILA) and/or Consumer Leasing Act (CLA).
According to the FTC complaints, ads touted sales, lease or financing options that seemed attractive, but were cancelled out by fine-print disclaimers. In other instances, the disclaimers did not disclose relevant terms, such as required down payments.  All of the financing offers, lease payments, and $0 down references in this ad are completely undermined by the fine print, which requires $3,000 down for all deals.
In a separate case, the FTC’s requested that the U.S. District Court for the Southern District of Florida temporarily halt the practices of Regency Financial Services of Lake Worth, Fla., and its CEO Ivan Levy, who allegedly charged consumers upfront fees to negotiate an auto loan modification on their behalf, but then often provided nothing in return.
The FTC also charged that National Payment Network, Inc. (NPN), headquartered in San Mateo, Calif., allegedly violated the FTC Act by deceptively pitching consumers an auto payment program – both online and through a network of authorized auto dealers — that it claimed would save consumers money. NPN failed to disclose that the significant fees it charged for the service often cancelled out any actual savings.

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