The Federal Trade Commission and 32 law enforcement partners today announced the results of Operation Ruse Control, a nationwide and cross-border crackdown to protect consumers when purchasing or leasing a car, encompassing 252 enforcement actions. The six new FTC cases include more than $2.6 million in monetary judgments.
There were 187 enforcement actions which include both civil and criminal charges of deceptive advertising, automotive loan application fraud, odometer fraud, deceptive add-on fees, and deceptive marketing of car title loans.
“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.” “Growing fraud and other deceptive practices in auto sales and financing are important issues affecting consumers when they are buying a vehicle,” said Joyce White Vance, United States Attorney for the Northern District of Alabama.
The FTC has taken two auto enforcement actions involving add-ons, which is the practice of a dealer or other third party adding to the vehicle sales, lease, or finance agreement charges for other products or services. 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.program averaged $775 on a standard five-year auto loan.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.
The proposed settlements in these actions prohibit the defendants from misrepresenting the purchase cost or any other material fact about the price, sale, financing or leasing of a vehicle. The proposed orders also address the TILA and CLA violations by requiring the dealerships to clearly and conspicuously disclose terms required by these rules.
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