By Hao Nguyen
Chief Legal Officer
On January 4, 2024, the FTC brought a formal complaint against a Connecticut-based dealership claiming that it deceived customers for years by charging them for junk fees for vehicle certification, add-on products, and government charges without their consent. These charges allegedly cost consumers thousands of dollars of unwanted and unauthorized charges.
The Timing is…Interesting
“This action follows on the heels of the [FTC]’s announcement of the [CARS] Rule, and once again makes clear that bait-and-switch tactics and hidden junk fees have no role in honest dealmaking,” said Samuel Levine, the director of the FTC’s Bureau of Consumer Protection.
This formal complaint comes only days after the FTC’s announcement of the CARS Rule and in spite of the National Automobile Dealers Association’s (and the Texas Automobile Dealer Association’s) legal challenge to the CARS Rule in the U.S. Court of Appeals. I am not one to “read the tea leaves” and predict what may happen, but, as a compliance attorney, what I am trained to do is prepare. So, preparation is what this industry needs to do.
“By failing to Prepare, you are preparing to fail.”
Though he did not have the federal government in mind when he contemplated this, Benjamin Franklin’s timeless words cannot be more appropriate for this situation.
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For the first article of our series titled “The End Of ‘MSRP-Only’ Advertising”, please go here. To attend the companion webinar relating to MSRP-only advertising (January 9 at 11am PST) or receive a copy of the recording, please register here.
If you have any questions regarding the CARS Rule, please send us an email at info@complyauto.com.