FTC cracking down on car advertisements - AmericaNowNews.com

Consumer

FTC cracking down on car advertisements

Maybe you've heard car ads like, "I want your car no matter how much you owe." Or, this one, "Credit upside down? Need a new car? We want to pay off your car."

The FTC says many of those ads are just not true -- and it's cracking down, calling on auto dealers to back up the ads or stop running them.

Consumer Attorney John Gayle says it's a victory for consumers. 

"It would have been nice if they would have kind of hammered them so that other car dealers would go 'Wow, not only are they going to tell me to stop and slap me on my wrist, they are going to hit my pocket book,'" said Gayle.

The case is the first of its kind by the FTC. The agency says several dealers across the country misled consumers into thinking they would no longer have to pay off the loan balance on their trade-in, even if it was more than the car's actual trade-in value.

The FTC claims the dealers just tacked the negative equity onto the new price. 

"Hopefully, the cracking down of this will have a ripple effect so that other car dealers across the country will stop similar deceptive practices when they are advertising their vehicles," Gayle says. "There are very good car dealers out there. There are honest car dealers that are trying to do the right thing and they may send out a memo to the sales managers."

He says that while the FTC ruling is a step in the right direction, he'd like to see a stiffer punishment.

"Unfortunately, the FTC is not putting any significant penalty on them. They are just telling them 'don't do it anymore and you're going to have to report to us for the next 20 years that you are doing it properly,'" he explains.

This case prompted the FTC to create a new publication on its website informing consumers about Negative Equity Ads and how to avoid it. There's also a section to file a complaint if you feel you've been misled or have noticed a misleading car ad.

For more information, visit the FTC page.

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