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Tuesday, May 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

FTC Goes After Auto Giant’s Ads

SIOUX CITY, Iowa (CN) - A chain of auto dealers violated a consent order that "expressly required" it "not to make misrepresentations about costs and terms of financing or leasing vehicles," the FTC claims in court.

The FTC sued Billion Auto and 19 affiliates on Dec. 11 in Federal Court, claiming it violated five terms of the 2012 consent order.

The family-owned company has nearly two dozen car dealerships throughout South Dakota, Iowa and Montana. Its radio, TV and prints ads run in six surrounding states. The FTC claims, inter alia, that the ads "failed to disclose and/or failed to disclose clearly and conspicuously terms for financing the purchase of the advertised vehicles."

The FTC cites an ad featuring cars with monthly payments of $179/month.

The fine print, which appears on screen for 3 seconds in a white font on a patterned background, reveals that a down payment of $2,000 is required, and that "the only consumers who qualify for this deal are persons who happen to be both (i) returning customers loyal to the manufacturer; and (ii) military members or veterans," the FTC says.

That ad "deflects attention from each offer's bottom-of-screen small type with multi-sensory effects: a moving and talking announcer; pounding music; pop-up graphics; shot transitions with whistle blasts; and alternating screen wipes from both sides," according to the lawsuit.

The FTC cites similar violations in the company's print and radio ads.

In an interview with Courthouse News, company president David Billion Sr. said the FTC's guidelines should be "more precise."

"We've asked repeatedly, 'What size type do you want? What should be the speed of talking, how many words per minute?'" Billion said. "They will not give a precise rule on what is acceptable to them."

Billion said he'd hired staff to scrutinize his ads for compliance, and that "We're doing everything we feel we can do other than not advertise."

The FTC seeks an injunction, costs, and civil penalties for five alleged violations of the consent order: misrepresentation, Truth in Lending violations, violation of consumer lease regulations, failure to retain and produce records, and failure to report on compliance.

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