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FTC, Illinois AG take action against dealerships

November 13, 2020
The Federal Trade Commission made a big splash in May when it announced a whopping $1.5 million settlement with a New York dealership for alleged discrimination in financing and alleged various deceptive business practices. 
The practices included the customary deceptive advertising and bogus charges, but also included an allegation that the Chevrolet and Honda retailer offered "certified pre-owned" Hondas, which are covered by the manufacturer’s seven-year, 100,000 mile warranty, wherein the customer was told he had to pay a "certification" fee to receive the advertised price and warranty, a practice prohibited by the manufacturer. 
The dealership also assessed "prep, shop, or reconditioning" fees for some certified pre-owned Hondas. The unluckiest customers paid both fees, totaling about $3,000, according to the complaint.
Closer to home, the office of the Illinois attorney general recently sued a suburban Dodge dealer for allegedly violating the state’s motor vehicle advertising regulations relating to sales events, trade-in values, discount substantiation, and advertised prices, as well as using fake checks and coupons in its advertisements, failing to disclose a consumer’s potential responsibility for negative equity on a trade-in, failing to promptly pay off a lien on a trade-in, advertising financing opportunities to those facing bankruptcy, and other miscellaneous charges. 
The complaint further alleges that the dealer violated a 2016 Assurance of Voluntary Compliance entered into by and between the dealer and the AG covering similar deceptive practices.
Both of the proceedings above should serve as a major red flag for dealers in their advertising and business practices.