Federal Trade Commission aims to reduce deceptive practices at car dealerships with new proposal

The Federal Trade Commission is stepping in as the U.S. auto market continues to see rising prices for both used and new vehicles due in part to, current inventory shortages.

The FTC is proposing action that would penalize companies that use tactics like false advertising. A common complaint among consumers is that dealerships are listing vehicles at discounted prices online; however, the price does not remain the same once they go to the dealership. 

Advertising rebates and discounts for specific individuals, like military personnel or educators, and presenting them to typical consumers would also be considered false advertising under this proposal. A disclaimer will need to be written specifying this in advertisements. 

The proposal also would require dealerships to state the costs upfront related to vehicles, including application costs and additional fees. Specifically, dealers will now need to state why the fees are or aren’t required.

The FTC claims these measures are necessary because the advertising tactics used by auto retailers disproportionately affect minorities, immigrants, people with disabilities, and service members.

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