Page 35 - Summer 2024

The Federal Trade Commission Act (1914) is the primary statute of the Commission.
Under this Act, as amended, the Commission is empowered, among other things,
to “prevent unfair methods of competition.” Also under this same act, the FTC has
2
proven its ability to enforce FTC Rules, such as the FTC Used Car Rule and its used
car window stickers. 3

Through various announcements, publications and legal actions, the FTC has clearly
stated its intention to “prevent unfair methods of competition” in the auto industry.
The FTC is aggressively pursuing, with various state attorney generals, the type of
‘unfair,’ deceptive acts and practices itemized in the postponed CARS Rule and taking
these actions under the well-established and long-standing FTC Act.

Therefore, regardless of the outcome of NADA’s CARS Rule lawsuit, dealerships
should still immediately activate their internal advertising and compliance audits,
update compliant business practices and engage in more purposeful employee
training.

Consider the following headlines regarding recent FTC actions and note that all of
the violations detailed are still being pursued by the FTC in 2024, even after the FTC
announced its order postponing the effective date of the Combatting Auto Retail
Scams (CARS) Rule:

1. FTC Announces Sweep Against 10 Auto Dealers - January 9, 2014
“‘Operation Steer Clear’ Drives Home That Auto Ads Must Be Truthful

The Federal Trade Commission announced today that nine auto
dealers agreed to settle deceptive advertising charges, and the
agency is taking action against a 10th dealer, in a nationwide sweep
focusing on the sale, financing, and leasing of motor vehicles.” 4

2. FTC, Connecticut Take Action Against Manchester City Nissan for
Deceiving Consumers, Forcing Junk Fees - January 4, 2024

“Federal court complaint against dealer, owners and key employees
charges deceptive and unfair practices involving “certified” used
cars, government fees, and add-ons.” 5

3. FTC and Wisconsin Take Action Against Rhinelander Auto Center for 35
Illegally Discriminating Against American Indian Customers and
Charging Unlawful Junk Fees – October 24, 2023

“Current and former owners agree to settlements that will stop
unlawful actions, return $1.1 million for consumer refunds.” 6
Continue on page 36.

On The Move 2023