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Auto ads generally compliant, but some sticking points remain

November 22, 2010
Area dealers and their advertisers increasingly abide with the state's detailed automobile advertising regulations, said representatives of the Illinois attorney general's office and the Better Business Bureau, but some rules continue to be broken. Patricia Kelly, chief of the attorney general's consumer protection division, and the BBB's Steve Bernas led discussion at a CATA seminar Thursday to re-examine the regulations and what to expect when ads run afoul. Kelly, whose office issued fines against dealers ranging from $1,000 to $30,000 in 2003, said the regulations exist to prevent deception. "If you toy with a rule to the point of deception, you violate the Consumer Fraud Act," she said. Most complaints to Kelly's office concern a vehicle's price in an advertisement. "If you advertise a car at a price, that's the price you have to sell it at," she said, referencing Section 475.310 of the advertising regulations. Salespeople should be aware of the advertised price, she said. Another fault: pricing with limited rebates (Section 475.530). "The only rebate that can be deducted from the advertised price is one that everyone who visits the store can get," Kelly said. "Recent college graduate" and the like represent limited rebates. Another common problem, said Kelly, is failure to disclose any "material terms" in the ad (Section 475.210). " 'Material terms' is a flexible standard reached after years of case law interpretation. What it means is, 'It's important to the customer,' " Kelly said. "Your obligation is to help people understand what they're getting." "Are you offering special financing or a rebate, and the customer has to choose one or the other? Then people must understand that they don't get both," she said. A fourth hot-button issue: Free gifts (Section 475.590). Dealers may advertise or offer gifts related to a vehicle purchase or lease only if the gift is offered through a manufacturer's program or a manufacturer-authorized and approved dealer advertising association. "Yes," said Kelly, "a dealer pays dues to his line association, but that's not a problem. If any other financing of the gift is going on, that is illegal." Under the CATA-BBB Ad Review Program, begun in 1996, the BBB scans the marketplace for all automobile advertising. Bernas, the BBB-Chicago's director of operations, emphasized that the Internet is not immune from the state's ad regulations. Bernas will notify an offending dealer about a noncompliant ad. Dealers usually oblige; 98 percent of them correct their mistakes. "Most dealers want to do it right, but some push the envelope or make a mistake. We're here to help you," Bernas said. If a dealer ignores Bernas's correspondence, or if the dealer commits the same offense three times, Bernas forwards the matter to the attorney general's office. Bernas issued 350 complaints to dealers in 2003, down from 550 complaints in 2002. The BBB maintains records of all complaints for three years, but they are internal documents; any complaints would not appear to consumers investigating a company. The BBB also tracks advertisers to determine if they commit the same offenses with several dealer clients. The advertiser and the dealer both are culpable for a noncompliant ad. Bernas encouraged dealers to report any noncompliant ads of their competitors-even anonymously. "It's completely confidential. Otherwise, it wouldn't work," he said. To alert the BBB about a noncompliant ad, call Bernas at 312-245-2514 or send an anonymous e-mail to autoregs@chicago.bbb.org"This program is emulated nationally," Bernas added. "Other BBB bureaus call me about it every week." Dennis O'Keefe, the CATA's attorney, said dealers who receive a complaint letter from the attorney general's office must be proactive. "Get on the telephone and talk to them. If you don't respond, then you're probably looking at a lawsuit," said O'Keefe. Bernas added that if dealership is sued by the attorney general over advertising infractions, the dealer would forfeit his BBB membership. "We will take the membership away from an organization if they don't follow the law," he said. The complete Illinois automobile advertising appear on the Web sites of the BBB, at www.chicago.bbb.org, under "BBB/CATA Automobile Ad review program" (sic); and of the CATA, at www.cata.info, under "Legal."
 

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