Feds Warn Dealers to Stop Deceptive Pricing in Ads

Welcome once again to Leato's Law. Here's Steve Leato. — If you've ever bought a car before, you know how confusing it can be trying to figure out how much the car is going to cost you. If you look at ads for cars, they'll say, "Oh, here's what the car costs. " But you and I both know that if you go and buy that car, by the time you're done, after the paper vortex that happens when you buy the car, the price of the car will be substantially higher than that advertise. And so, that's been something upsets people and has been upsetting people for years. And John and Kevin both sent me notes and said, "Steve, check this out. The Federal Trade Commission claims they're cracking down on that. " And that's my editorializing because whether or not anything changes, we'll see. But this is directly from the Federal Trade Commission. FTC warns 97 auto dealership groups about deceptive pricing. Letters were sent out to the dealerships and this dealership groups stressing the need for truthful and transparent pricing in the automotive industry. We're talking about sales of automobiles. Federal Trade Commission is sending letters to 97 auto groups nationwide warning them that the prices they advertise must be the total price including all mandatory fees that consumers will be required to pay. Now, right there, you have an immediate problem because there's a chance that some dealerships are going to go, "Well, some of the fees aren't mandatory. " And if the person asks, we might knock it off, but if they don't ask, we'll leave it there. Therefore, it's not mandatory. So, we don't have to mention that double secret documentation fee. Not the dock fee, the 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 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 that the commission enforces. The FTC, this is them speaking now about themselves in the third person, 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. As the director of the FTC's Bureau of Consumer Protection speaking, the FTC will remain focused on monitoring auto dealerships to ensure that the market functions efficiently and competitors are transparently competing on price. One of the problems is that all the dealerships do it. So, if one dealership stopped doing it and became more competitive, then it might cause others to start not doing it also. But they all kind of do it. It's like an industry standard. So, the letters are part of the FTC's ongoing work to ensure price transparency across multiple markets, including other things you're looking at like rental housing, ticketing, hotels, grocery and delivery services, and auto sales and leasing. To help support affordability in the marketplace, the FTC is dedicated to ensuring that consumers only pay the advertised price for products and services and are not subject to undisclosed fees, hidden charges, or other illegal conduct. Now, there's a list of things that they want the dealerships and auto groups to look at. And one of them is something I've not mentioned yet, but I have a story about where I went with somebody to go look at a car and they ran a scam on us. They didn't get us for any money, but they wasted our time. So, the FTC sent letters to dealers citing examples of illegal pricing practices in the auto industry, including advertising a price that does not reflect all required fees, advertising a price that reflects rebates or discounts not available to all consumers. And I I've seen that before where they actually say, "Here's the price. " there's a little asterisk and you look down below and the asterisk says that's if you get employee pricing from the manufacturer. So they're going to say, "Well, we do that little asterisk thing. We're good. " Right? Advertising a price that fails to take into account the amount of an additional required down payment. Conditioning the advertised price on the consumer using dealer financing. Requiring consumers to buy additional items not reflected in the advertised price. And the last one is the one I'm talk about advertising unavailable or non-existent vehicles. And so I've mentioned before that I have friends who will call me up say, "Steve, I'm car shopping right now. Will you come with me? " I love going car shopping with people because I just stand there. Now I It might be that people recognize me now

but I know in the old days they didn't. And so they have no idea what I do for a living. I just I'm Steve. I'm a friend, you know? I'm just I'm just here. And they hate that, by the They love it when people shop alone because they can lean on you harder. And a friend of mine said, "Hey, Steve, I found a car I want to go look at. " And it's a specific make and model in a year. And they have one at this dealership. I'd never dealt with a dealership before, but it was a distance away. And so we drove over to look at this car and we pull in the lot and there's a bunch of cars there. Go inside and my friend says, "I'm here to talk to so- and so, salesperson. " Oh. Person walks over. Oh, yeah. Yeah, I talk to you. Great. How you doing? Great. Let's go look at a car. We go outside. Person takes us to a different car. Different make, different model, different year. Ever. It's not the car. My friend goes, "Um, I called you specifically about a car that's ABC, and you're telling me a car here that's XYZ. " Oh, yeah. That car, we just sold it. We When you say you just sold it recently. Yes. My friend goes, "I was on the phone with you an hour ago. " "Yeah, we sold it in that hour of time between when I spoke to you and now. We sold it in that period of time. " And I'm looking around the lot and I go, "Where is it right now? " "Oh, the buyer's already they're gone. They Yeah, they they showed up, test drove it, all the dealership paperwork, everything, and they're gone. Yeah, it's gone now. I don't think they had the car. ever had a car. I think they just listed a bunch of cars for sale. Or maybe they they sold this car months ago and they just they keep showing it as being available. That car was not sold in the last hour. That car was long gone. And the salesperson acted like she was offended when she goes, "I've got another one just like it. " I said, "Okay, show us that. " And she goes, "Right here. " And she was showing us a car from a different manufacturer, different make, different model, different everything was I'm like, I don't understand. Why do you think it's like if I was showing you um I don't know a Ford Explorer and you go, "Well, I want to see a a Chevy Tracks. " Well, no, this is a Ford Explorer. It's the same thing. No, it's not two total. They're different things. And what was weird was this salesperson then when she realized that we weren't in the market for whatever it was she was selling, she's like, "Well, let me show you some other stuff. " And this is a small lot. They didn't have that many cars. And I'm looking around. I'm going, "No, you do not have the car we're looking for. " And we we didn't make a scene, but I was so annoyed because the salesperson lied to my friend to say they had this car on the lot. It's here. Come on in. We get there. Oh, no. We just sold it. No, they didn't. But they know that the average person who's there is gonna go, "Fine. What else you got? You just sold it. Darn my luck. " you know, and so it's scammy practices like that um really give some used car dealers a bad name. Would I ever go to that used car dealer again? No, of course not. But they don't care because there's enough used car dealers out there and enough people shopping for used cars. They still get phone calls. And today they're telling people that car is still there even though they sold it 3, four years ago. I'm sure. So the letters also noted several pending actions. the Federal Trade Commission has brought to address deceptive pricing practices in the auto industry, including cases against and they list a bunch of actual dealerships. They're basically saying, "Look," and dealership groups, and look, if you guys don't straighten out what you're doing, we're going to do to you what we're doing to them. So, the Federal Trade Commission works to promote competition and to protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. The FTC does not give out prizes. They might sue you, but they won't give you a prize. So, you can learn more about the consumer topics at consumer. fttc. gov. You can also report fraud, scams, bad business practices at reportfraud. fttc. gov. And you can follow the FTC on social media. I bet their Tik Tok account just rocks. But they do issue consumer alerts and the business blog and you can get news alerts, etc., etc. Just go to ftc. gov and you can find all the information. But yeah, they're warning dealership groups to get together their act

primarily on how they advertise prices. Be honest. What's the price actually going to be? Advertise that price. And uh there's other things they don't want you to do, but you also should not advertise unavailable or non-existent vehicles. But hey, we just sold it. I would I was this close kind of wish I had now to pulling out a $100 bill and saying, "Can you show me the RD 108 that you just had filled out by that buyer? " Because it'll be dated today, right? You got that handy. Here's a $100 bill. Just show it to me. Oh, we can't show you that. That's confidential is what the woman would have said to me. And in that tone of voice, I'm sure. So, John and Kevin, thanks for sending this. Federal Trade Commission warns 97 auto dealership groups about deceptive practices and pricing, and they're telling people to straighten up or they might file legal actions. That's from the FTC itself. Questions or comments, put them below. We'll talk to you later. Bye-bye. Thank you for watching Leato's Law. One can never know for sure what a deserted area looks like.