How the FTC’s campaign to crack down on deceptive auto advertising affects your dealership.
Have you heard of “Operation Ruse Control” yet? It’s something you need to know about, as it’s a serious issue for dealers everywhere.
The FTC is partnering with 32 law enforcement groups for a crackdown on dealers who run afoul of their regulations. Dealerships in Florida, Alabama, New Jersey, California and more were all recently hit with extensive penalties when they were caught utilizing advertising practices the FTC deemed deceptive, and that won’t be the end of it. Are you confident that your dealership is safe?
The good news is this: it benefits everyone when dealers avoid deceptive advertising. When customers believe that they can trust a dealership, they’re much more likely to return again and again, and to recommend it to their friends and family. Implementing dealership advertising best practices won’t just keep you out of trouble with the FTC– it will also help you grow lifelong relationships with your customer base.
What can a dealer do to stay on the right side of the FTC?
Avoid advertising misleading offers.
Many of the cases of the FTC investigating a dealership came about because that dealer advertised a “too good to be true” offer– for instance, “zero down payment” when a down payment would actually be required to finance the vehicle at the featured monthly payment amount, or advertising a vehicle at a certain low price and neglecting to include mention of the mandatory fees that would go along with it.
Other instances involved dealer advertisements that depicted a vehicle with add-on features– like a sunroof– that would make the vehicle cost more than the advertised price.
The FTC recommends that dealers avoid these kinds of misleading advertisements, and as has been shown by “Operation Ruse Control,” dealers can get into a lot of trouble for them.
Be clear about the fine print.
It’s important that disclaimers and footnotes not only be included in your advertising messages, but that they are easy for customers to spot and read.
Dealers must make it exceedingly clear to customers how much a vehicle will cost, without obscuring any hidden fees and catches. Restrictions, qualifications and limitations– such as a discount that only applies to certain types of customers– must be evident in your advertising.
Clearly and obviously disclosing the fine print on an offer is the key to ensuring that dealers are playing nicely with the FTC’s regulations.
Be mindful of credit regulations.
Credit laws and statutes are there to protect customers and dealers alike. There have been multiple instances thus far as part of “Operation Ruse Control” in which a dealership has gotten into trouble based on its violation of federal credit statutes.
For instance, when certain terms, dubbed “triggering terms,” are used in advertisements, dealers are required to make associated disclosures– and if they do not, they can land in hot water with the FTC. The best way to avoid getting into trouble for credit law violations is to work with compliance experts who know exactly what a dealer can, can’t, and must say.
You can learn more about “Operation Ruse Control” on the FTC’s website. In the meantime, if you’re a Force Marketing client, rest assured that our team works hard to ensure that all advertisements and marketing messages are in compliance with manufacturer regulations.