Understanding pandemic-driven predatory pricing tactics

On Behalf of | Mar 1, 2022 | Auto Dealer Fraud

The following news story highlights Consumer Law Group, LLC’s work on cases appearing in more than 120 markets nationwide.

Showrooms in car dealerships have advanced over time. Instead of the outside, fenced-in lot with stickers on a variety of cars, salespeople now occupy beautiful and spacious areas with meticulously shiny and sparkling vehicles.

However, the one thing that hasn’t changed is underhanded tactics when it comes to the vehicle’s price.

Sinister “bait-and-switch” tactics

Accusations of motor vehicle dealerships engaged in predatory pricing seem hard to believe, considering the skyrocketing prices of cars. CARFAX reports that a used car’s median price has jumped 40 percent from January 2021 to January 2022, with sedans representing the most significant increase.

However, a nationwide epidemic of consumer complaints sees dealers accused of promoting one price, only for it to change after luring the customer to arrive at the dealership.

The tactics are in direct violation of the Unfair Acts or Practices of the Federal Trade Commission Act. Section 5 specifically bars any service providers – including car dealerships – from misleading customers. Simply put, the dealership that advertises a price has to sell the vehicle at that same price.

However, enforcement in the form of fines and penalties varies from state to state, allowing salespeople to employ these “creative tactics” that only pad a dealership’s bottom line.

Consumer advocates encourage consumers to be on guard and highly skeptical. Proactive steps are paramount, including comparison shopping, reading reviews, and paying particular attention to the fine print of any contract. The trust placed in a luxurious-looking dealership filled with friendly salespeople could lead to disappointment and an increased amount of money leaving their bank accounts.

Being overcharged for a vehicle requires immediate legal action against a motor vehicle dealership. In addition, filing a complaint with a consumer protection agency and state attorney general could create a record that can also educate other consumers.