Two years ago the Federal Trade Commission served notice to five car dealers over what it considered breaches of the Truth in Lending Act regulations. One of the issues was that certain dealer ads promised to pay off the loan on a buyer's trade-in, regardless of the amount; customers thought they were getting completely out of a loan, but the dealerships would add the negative equity from the old loan into the purchase price of the new car. Another issue for the FTC was that the ads didn't clearly state loan terms like annual percentage rate.

This month the FTC sanctioned two of those five dealers, Billion Auto and Ramey Motors, for continuing to run ads with small print that was either misleading or impossible to discern. In one instance, Billion Auto was caught for promoting the price of a vehicle after every available rebate without making it clear that not all buyers would be eligible for every rebate, so prospective buyers could get hit with a much higher price when it came time to negotiate a deal. Ramey Motors got pulled up for a television ad with fine print, like a down payment requirement, that was impossible to read.

Billion Auto has agreed to pay $360,000 in penalties to settle the matter, Ramey will be fined $16,000 for every infraction of the 2012 administrative order. On a side note, an Automotive News piece on the FTC actions has a lengthy comment from "Carl Bonroy," who says he owns a dealership, explaining how convoluted the situation is. Bonroy takes aim at the FTC, manufacturers with too many exclusionary rebates, dealers that don't make the terms clear and customers who only pay attention to the lowest advertised price. The summary of Bonroy's viewpoint is: "OEM's, FTC, do you *truly* want real advertising? STOP offering a rainbow of rebates! At very least, forbid ALL dealers from including ALL rebates into their sale prices and lease payment ads. Let them use ONLY rebates that 100% of people qualify for and guess what? 75% of the bullcrap would be over with."

You can watch one of the problem Billion Auto ads in the video below.

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