FTC Fines Dealership $80,000 Over Deceptive Ads

The Federal Trade Commission has issued an $80,000 civil penalty to a West Virginia dealership after what they view as non-compliance with a consent order from 2012. Ramey Motors has agreed to pay the FTC an $80,000 civil penalty.

We reported previously the FTC issued Ramey Motors a consent order involving their advertising. The FTC has decided that they didn’t comply with the order and must pay a penalty. The previous consent order from 2012 required Ramey to property inform consumers about terms such as a down payment required for a vehicle purchase or lease. A 2012 press release from the FTC on the matter indicates the type of ad claims that caught the attention of the federal government.

In a press release, the FTC indicated that Ramey Motors advertising included the claim, “Ramey will pay off your trade no matter what you owe . . . even if you’re upside down, Ramey will pay off your trade.” This statement was found to be misleading by FTC officials. In the release, David Vladeck, director of the FTC Bureau of Consumer Protection explained the thoughts on the part of the FTC.

Vladeck said, “Buying a new car or truck is a major financial commitment, and the last thing consumers need is to be tricked into thinking that a dealer will ‘pay off’ what they owe on their current vehicle, when they really won’t. The Federal Trade Commission is constantly on the lookout for potentially deceptive ads, and brings actions to stop them when appropriate.” With the payment of the $80,000 civil penalty, the FTC considers the issue with Ramey Motors violating its consent order to be closed.

What kind of authority do you think the federal government should have over dealership advertising? Should the FTC be able to decide what is and is not deceptive advertising?