My Dad, rest his soul, had to drop out of school in the eighth grade when his Dad passed away. He had five older sisters and a Mom to take care of and he was the only man left in the house. Dropping out of school that young, he was not highly educated, but one of the things he taught me early on was, if it sounded too good to be true, it almost always was. I can think of no better example of this than some of the ads you see from car dealers.
Dropping out of school that young, he was not highly educated, but one of the things he taught me early on was, if it sounded too good to be true, it almost always was. I can think of no better example of this than some of the ads you see from car dealers.
Just when I think I have seen all the deceptive ads possible, somebody comes up with something new, and even with my experience, I have to go to the fine print. Many times I have to freeze my TV and read through the microscopic wording to see how it is being done.
I have spoken to State agencies about the process in which they monitor deceptive ads. They say they don’t have the personnel to do it themselves and must rely on people letting them know if something doesn’t look right. They admit that most of the enforcement action comes from other dealerships turning in the offenders. Unfortunately, this does not happen often enough and in Texas, for instance, it may be months before investigators get around to taking action. By then, many consumers have been defrauded.
Maybe there is some relief in sight. Last week, the Federal Trade Commission announced they had taken action against five dealerships in South Dakota, Connecticut, West Virginia, and North Carolina. The dealerships were charged with deceptive ads based on the claim that the dealerships would “pay off your trade no matter how much you owed”. Terms of the settlement have not yet been disclosed.
The government alleges that the dealerships led people to believe there would be no penalty to them even if the amount owed on a car exceeded the value of the car. In reality, a dealer simply adds the amount owed on a trade-in back into the new finance contract once an approval has been obtained. The value of the car doesn’t enter into the equation, especially when you consider that the dealer has to pay the trade-in loan off to get the title.
Clearly, this was a message to dealers all over the country that this sort of claim will not be tolerated. I would bet that there is at least one dealership in every major market in the area that is using this phrase. What I was so glad to see in the action taken by the FTC was that in at least one case, the deceptive ads were found on the Internet. It has been my contention that the deceptive dealers thought they were safe running ads on the Internet that did not meet the scrutiny of radio, TV and newspaper ads.
I hope the Federal Trade Commission will continue to monitor ads and look aggressively for dealers who are trying to mislead people. Luckily, most people that have been lured into a false ad never fall for it again, and they tell others.