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2015 GNYADA Membership Directory
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expert) as well as the $81,000 in attorney’s fees because the Magnuson-Moss Act permits the trial court to
award attorney’s fees and costs to the prevailing party and the award of attorney’s fees does not need to be
proportionate to the award of money damages.
So on a vehicle sold for $22,000 that generated a judgment for damages for the plaintiff of approximately
$11,400, the dealer got socked to pay over $81,000 in the plaintiff’s attorney’s fees, as well as their own. It is
hard to imagine this case could not have been settled and you should be aware that laws like Magnuson-Moss
allow this cost-shifting of the plaintiff’s attorney’s fees to you if a case goes to trial or a final award is entered in
favor of the consumer. Don’t pay $92,000 for a $22,000 vehicle sale.
Recommended Practices
1. If you conduct direct marketing, scrub your target lists for persons who have excluded themselves from the
means of communication you intend to use (telemarketing, faxes, and email). You should keep a separate
list of consumers who opt out of telemarketing, faxes and email and be sure to not use auto dialers for
cell phones or prerecorded telemarketing messages for any phones unless you first obtain the customer’s
written consent to receive prerecorded calls at the designated number. All cell phone telemarketing calls
(which include textmessages) require the consumer’s priorwritten consent. Adequately scrub telemarketing
lists of phone numbers against the FTC’s National Do Not Call Registry, your state’s Do-Not-Call list and
your dealership’s list of persons who have asked not to be called. The Direct Marketing Association (www.
the-dma.org) also maintains “do not contact” lists that you should scrub your lists against. If you are
telemarketing, get assurances from vendors on exclusions of persons listed on federal and state Do-Not-Call
lists and double-check against state Do-Not-Call lists, as well as your own dealership’s list of customers who
have asked not to be called. The uncapped class action liability potential under the Telephone Consumer
Protection Act makes this a critical area for you to be compliant.
2. Understand what you can and cannot do under advertising laws and regulations particularly given the
FTC’s aggressive enforcement of deceptive advertising. The FTC’s website, www.ftc.gov, and state Attorney
General websites provide a great deal of information on auto industry advertising guidelines. Your state
Attorney General’s website may show or describe ads that have been determined to be unfair or deceptive,
and check the Attorney General’s website for recent enforcement proceedings involving auto dealer
advertising as well. In addition to the 17 FTC settlements for deceptive Internet advertising in the past
three years, there were several dozen Attorney General enforcement actions against auto dealer advertising
in 2014, many involving settlements in excess of $100,000. Make sure your ads are not similar to those.
If the advertising includes financing references, remember that certain “triggering terms” in advertising
require additional disclosures under TILA Regulations M and Z. State Motor Vehicle Departments also have
rules and regulations for dealer advertising, and you should check their websites as well. Be sure to know
state as well as FTC limitations on using words like“free,”“$100 above invoice”and other advertising terms,
as the rules vary state-to-state. Make sure your advertising is clear and conspicuous using the four “P”s
(prominence, presentation, placement and proximity) as a starting point.
3. Avoid even the appearance of false or misleading advertising. Be able to prove the truth of literally every
statement in your advertising and avoid putting required disclosures in“mouse type”or in a color that blends
into the background. Use plain English writing and don’t use abbreviations not commonly understood
by the public. If you are advertising sales of repossessed or off-lease vehicles, be prepared to show that