Auto Dealers' Deceptive Lease Offers Hinged on Rare 800 Credit Score, FTC Says

Those seemingly too-good-to-be-true auto lease deals advertised online and on television often are just that: too good to be true. Key requirements are often missing from the screaming headlines that boast “NO MONEY DOWN.”

The Federal Trade Commission alleges that two Ohio auto dealers failed to properly disclose certain terms in their ads for lease deals, such as the total amount due at signing, whether a security deposit was required, and credit score requirements.
The FTC’s administrative complaint alleged that Progressive Chevrolet Company and Progressive Motors Inc., of Masillon, Ohio, promoted “sign and drive leases” and hid a key requirement in hard-to-read fine print. That requirement was that prospective buyers had to have an 800 BEACON credit score to qualify for the advertised best deals.
“The typical consumer does not have an 800 BEACON score or higher,” the FTC’s complaint reads. “The typical consumer does not understand what a BEACON score is or know that fewer than 20% of consumers have a BEACON score of 800 or higher. Moreover, the typical consumer does not understand or know what an industry-specific credit score is or how it may differ from a generic credit score.”
There are several different brands of credit scores. FICO is the most well-known and most widely used. But there are others such as VantageScore, NextGen, BEACON, and EMPIRICA. The Equifax BEACON score has a range of 300 to 850. VantageScore is a collaborative score used by all three credit bureaus: Equifax, Experian, and TransUnion.
Reads the FTC complaint:

With each pictured vehicle are the statements repeated from the beginning of the ad: “Sign & Drive” and “Zip, Zero, Zilch – Nothing Down.” These phrases are repeated at least 10 times within the advertisement. Only at the bottom of the
advertisement, in fine print and not in close proximity to the advertised vehicles, does the advertisement disclose the term of the lease, that the payment does not include tax, title, and fees, and that the offer is “[s]ubject to 800 beacon [sic] score or higher with approved credit.”

The FTC’s proposed settlement order with the auto dealers, which will remain in effect for 20 years, prohibits the respondents from advertising misleading lease or financing terms. It also requires them to clearly and conspicuously disclose all qualifications or restrictions on a consumer’s ability to obtain the advertised terms.

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