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Seminar reviews dealer rules

October 28, 2011
While a dealer can’t advertise or offer a free gift in connection to the sale or lease of a vehicle, why is it OK to advertise that the fourth tire is free? Because the Illinois rules on motor vehicle advertising concern only the sale of vehicles, not aftermarket products.
 
Some dealers thus needlessly limit themselves in their campaigns for market share against independent service centers.
 
The topic was one of many discussed at an Oct. 20 CATA seminar that turned to the Illinois attorney general’s office and the Better Business Bureau for a review of the state’s rules for vehicle ads.
 
Established in 1992, the regulations establish parameters and protect consumers, said Assistant Attorney General Greg Grzeskiewicz. But they also protect competing businesses by leveling the playing field, he said.
 
Grzeskiewicz said lawsuits by his office against dealers and their advertisers have declined during his 11 years in his position. But he does act against those he considers “just way out there, bizarre.”
 
“What’s the point of your ad?” Grzeskiewicz asked. “If the point is to confuse or trick people, you’re going to have a problem.”
 
He said an ad which indicates truckloads of repossessed vehicles would be on-site for a weekend sale implies to consumers that they would find a bargain. But if the lot really just contained a dealer’s existing inventory, the ad is based on a false pretense.
 
The BBB-CATA Advertising Review Program, begun in 1996, can help dealers avoid a suit. The BBB reviews dealer ads and sends a dealer notice of a rule infraction. If a dealer fails to shore up the ad within 30 days, the BBB forwards the matter to the attorney general’s office.
 
Steve Bernas, president of the Chicago-BBB, noted that 95 percent of his company’s notices last year were resolved without involvement of the AG. The BBB is prepared to review dealer ads before they go public. For consideration, contact Jorge Garcia at jgarcia@chicago.bbb.org or (312) 832-9193.
 
“We’ll give you our best sense of it,” said Patricia Kelly, senior counsel of the Chicago-BBB, “not based on the AG, but on a consistent history of what we see.”
 
Kelly said the most common infractions she has seen in the past 12 months include book values taken from noncurrent editions or from different market areas, and various price-beating claims.
 
Kelly said one dealer offered to pay customers $500 if they showed the dealer another’s price he couldn’t beat, but the proof had to be in the form of a financed deal. Kelly said that is too burdensome because the customer likely couldn’t unravel the done deal.
 
Other common faults:
 
Clear and conspicuous disclosure of material terms. Disclosures at the end of some radio spots are spoken too quickly and/or too quietly. Related to that, an audience member asked if listeners could be directed to a website to review the disclosures. But Kelly said a claim can’t be made in one forum but its disclosures made in another.
 
Internet pricing. It is a violation to list different selling prices for a vehicle in different media; it must be the same in all.
 
‘Guaranteed lowest price.’ To make such a claim, the dealer must systematically monitor competitive prices in the trade area. “In order to say you have the lowest price,” said Kelly, “you really have to be the lowest.”
 
Clearance sale. The word cannot be used arbitrarily. It applies only when a vehicle model can no longer be ordered from the factory.
 
No-haggle prices. A dealership either haggles or it doesn’t. “You can’t negotiate sometimes and not negotiate other times,” said Kelly.
 
Consumer Fraud Act. Bad: “We will pay off your loan.” Better: “We will build your old loan into a new loan.”
 
On advertising aftermarket products, CATA general counsel Dennis O’Keefe, who moderated the seminar, said enforcement of lowest price claims—“We’ll meet/match/beat any offer!”—is vague. “Just make sure you disclose the terms,” said O’Keefe. “What does the customer have to do to get the lowest price?”
 

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