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HOT TOPICS
2015 GNYADA Membership Directory
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was deceptive or misleading: (1) prominence; (2) presentation; (3) placement; and (4) proximity. Deceptive
advertising takes many forms, especially when it comes to auto dealers. Prominent headlines or body copy
cannot be contradicted or materially modified by small-type-size footnotes or disclosures not located close
to the qualified statement or where a consumer would be expected to look for it. A good rule of thumb is
that a footnote should be in plain English and can explain but not contradict, confuse, materially modify,
or unreasonably limit the principal message and the footnote’s explanation should be on the same page or
document where it is first referenced in the text and in a conspicuous type size of at least 10-12 points as a best
practice. Statements such as“repossession sale,”“fleet liquidation,”or other unusual sale circumstances must be
true in fact. If a vehicle is advertised at “factory invoice” or similar term, the terms must represent the dealer’s
ultimate total vehicle cost, including any holdbacks or manufacturer incentives. Dealers need to ensure that
every statement in an advertisement is truthful.
State Advertising Laws and Regulations
Almost all states have laws specifically prohibiting
misleading advertising. An example is Florida, which
prohibits any statement known or which could have
been ascertained to be untrue or misleading and
which was made with the intent or purpose of selling
goods or services. Mississippi lists a series of phrases
that are deemed to be untrue including “everybody financed,”“no credit rejected,”“name your own monthly
payments,”and a statement that no other dealer gives a greater allowance for trade-ins.
Florida’s law gives consumers a right to sue for misleading advertising and specifically provides that a consumer
can recover attorney’s fees and punitive damages. So does New Jersey, which allows for recovery of treble
damages“in addition to any other appropriate legal or equitable relief.” An Arkansas Motor Vehicle Commission
Rule imposes upon auto dealers “primary responsibility for truthful and non-deceptive advertising” and
includes 20 pages of detailed rules for auto dealer advertising. Any advertising rule violation is automatically
considered to be a violation of Arkansas law. Louisiana’s Motor Vehicle Commission specifically prohibits using
any abbreviations in dealer advertising that are not commonly understood and lists FTB, A/R, TOP, POF and
DOC as examples. Connecticut regulations give 31 different examples of deceptive dealer advertising practices
that constitute unfair or deceptive acts or practices, including a dealer not selling a vehicle or vehicles at an
advertised price, and using advertising terms such as “at cost”, “below invoice” or similar words unless the
price represents the dealer’s actual cost net of any holdbacks, rebates, promotional fees or other manufacturer
incentives on the vehicle. NewYork’s lawmandates that the advertising be viewed from the perspective of what
is omitted as well as what is explicitly stated to determine whether considered in totality the ad is deceptive.
These are just examples of current state laws and regulations that govern auto dealer advertising.
The advertising requirements for dealers are different in each state. The Attorney General and state Motor
Vehicle Department websites are two good resources to find rules and regulations concerning what advertising
activities are permissible and impermissible for auto dealer advertising. Attorney General websites usually
publicize enforcement actions brought against auto dealers for deceptive trade practices, including deceptive
advertising, as well. Many state Attorney General offices publish specific guidelines for auto dealer advertising
in that state as well.