FTC & the Auto Marketplace

You’ve probably heard about the Federal Trade Commission (FTC) before – a government agency that’s dedicated to protecting the American consumer. The FTC addresses mortgage, credit repair, and debt collection scams to name a few. But, did you know that it also acts as a watchdog in the auto marketplace?

According to the FTC, “Buying or leasing a car is the biggest financial transactions for many consumers aside from owning a home, and having access to a vehicle also is essential for many Americans to carry on their daily lives.” The agency goes on to say that it “plays several important roles in making sure consumers get a fair deal in the auto marketplace.”

What are these roles?

  • The FTC initiates various auto-related enforcement actions, including those that pitch bogus auto warranties, and dealers that engage in deceptive advertising.
  • The FTC enforces what’s known as the “Used Car Rule.” This rule requires windshield stickers to be placed on used cars at dealers, which give consumers vital information about who pays for repairs when something goes wrong with the vehicle that they buy.

On March 31, 2017, the FTC issued a press release entitled, “FTC Approves Final Orders Settling Charges That Used Auto Dealers Touted Inspections Without Disclosing That Some Cars Were Subject to Unrepaired Safety Recalls.” The companies involved some household names, including CarMax, Asbury Automotive Group and West-Herr Automotive Group. According to the FTC, the above companies “touted how rigorously they inspect their used cars, yet failed to adequately disclose that some of the cars were subject to unrepaired safety recalls.”

In the end, the final orders from the FTC announced that CarMax, Asbury and West-Herr were prohibited from claiming their used vehicles were safe, that they have been repaired for any safety issues, or that they have undergone a safety inspection, unless such vehicles are “free of open recalls, or the companies clearly and conspicuously disclose that their vehicles may be subject to unrepaired recalls for safety issues.”

Are you driving a lemon? Are you dealing with a company that has attracted the FTC’s attention? To learn how to protect your safety and your consumer rights, contact our office to schedule a free consultation with a California Lemon Law attorney!

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