The Federal Trade Commission (FTC) has just ended its comment period for a proposed new rule aimed in part at bait-and-switch tactics and junk fees used by some auto dealers. The FTC says it wants to “eliminate the tricks and traps that make it hard or impossible to comparison shop or leave consumers saddled with thousands of dollars in unwanted junk charges.” The new rule would also require fuller and clearer disclosures by dealers when making sales.
Under the proposed changes, the FTC would be able to recover consumers’ money if it found they had been “misled or charged without their consent.” Let’s look at some highlights of the changes the new rule would address.
This occurs among many types of retailers in addition to car dealers. It’s a tactic where false advertising is used to bring in prospective customers. With car dealers, this could involve anything from the price of a vehicle to financing terms to rebates that aren’t, in fact, available. Often the model of vehicle used in the ad isn’t even available.
The proposed rule would prohibit dealers from charging buyers for “add-on products and services that provide no benefit to the consumer.” It would also require dealers to give customers the price of the vehicle with no optional add-ons.
Not surprisingly, groups and think tanks that favor less regulation in the auto industry and business in general have spoken out against the rule. A comment by a representative of one such group called it a “paternalistic edict [that] runs counter to the central tenets of both democracy and capitalism.” They seem to be particularly bothered that the FTC would determine what add-ons are “junk” and have no real consumer benefit.
Of course, the rule doesn’t prohibit buyers from getting any add-ons to a vehicle that are available. It just calls for more transparency in what, for most consumers, is a major purchase – and from an industry that’s long been known for high-pressure and less-than-honest sales tactics.
If you believe you have been the victim of these or other fraudulent tactics, it’s wise to seek legal guidance. This will help you determine your options for seeking justice and compensation.