2 The Hampton Roads Messenger


Volume 9 Number 10


Federal and Local Agencies Crack Down on Auto Sales Fraud


our partners are working together to crack down on deceptive marketing about car sales, leasing and financing.”


The FTC’s action against Ross


Nissan of El Monte and Burke Nissan of Birmingham came after the vehicle sellers agreed to settle charges that they ran deceptive ads that violated the FTC Act and the Truth in Lending Act.


Their ads touted sales, lease


or financing options that seemed attractive but were cancelled


out by


fine-print disclaimers, according to the FTC complaint.


Operation action,


recently


BY GEORGE WHITE Federal, state and local agencies


are continuing to crack down on auto sales scam artists who have been taking consumers for a ride.


The Federal Trade Commission


(FTC) on May 29 approved final court settlement orders involving two auto dealers that deceptively advertised the sale, financing and leasing of their vehicles. Under the settlement orders, Ross Nissan of El Monte in metropolitan Los Angeles and Jim Burke Nissan of Birmingham, Alabama are prohibited from misrep- resenting the cost of buying, financing and leasing of their vehicles.


latest enforcement actions stemming from


Ruse Control,”


The settlement orders are the “Operation


multi-agency sweeps of suspected


American and Canadian auto dealers and auto loan financiers made since January 2014.


The FTC said it worked with


32 state and local law enforcement partners to lodge 187 court complaints in the U.S. and 65 actions in Ontario and British Columbia, Canada. The charges include allegations


of


deceptive advertising, automotive loan application


fraud, odometer fraud,


deceptive add-on fees and deceptive marketing of car title loans.


is one of the largest purchases they’ll make,”


“For most people, buying a car said


Jessica Rich, director


of the FTC’s Bureau of Consumer Protection. “Car ads must be truthful, loan terms must be clear and dealer practices must be honest. That’s why


In a related Ruse FTC that


the alleged


the National Payment Network


(NPN),


based in San Mateo, California, violated the law by pitching – both online


through a network of authorized


that


dealers – an auto payment program


finance it


claimed would save consumers money.


The company


“failed to disclose that the significant fees it charged for the service often cancelled out any actual savings,” the FTC said. “The fees to enroll in NPN’s program averaged $775 on a standard five-year auto loan.”


and auto


June 2015 NPN agreed to a settlement.


Under it, the company will refund more than $1.5 million to consumers and waive another $949,000 in fees to current customers.


The FTC said the scale of the


fraud by all of those cited in the Operation Ruse investigation is significant and that poor people and minorities have been victimized dis-


AUTO SALES FRAUD PAGE 3


How to Avoid Auto Sales Scams Here are some auto ad claims that may be deceptive — and why.


Vehicles are available at a specific low price or for a specific discount.


What may be missing: The low price is only provided after an exorbitant down payment is made and after other charges such as taxes and licensing and document fees are included.


Other deceptive pitches: The discount is only for a pricey, fully-loaded models; or the reduced price or discount offered might require certain qualifications such as being a recent college graduate or having an account at a particular bank.


“Only $99/Month”


What may be missing: The advertised payments are temporary “teaser” payments. Payments for the rest of the loan term are much higher.


A variation on this pitch: You will owe a balloon payment — usually thousands of dollars — at the end of the term.


“Zero” or “Low-Rate” Loans


What may be missing: The low advertised annual percentage rate (APR) may apply only to loans up to a certain amount, which may be significantly less than the purchase price. You will pay a higher APR for loans that cover the balance of the purchase price.


“$0 Due at Lease Signing”


What may be missing: The fine print indicates that additional fees — sometimes several thousand dollars — are due at lease signing. “You’ve won!”


What may be missing: The prize may not be available because the offer is just a tactic to get you into the showroom. Other Tips


Research the dealer before visiting the sales lot. Check the dealer’s reputation online by searching for the company’s name with words such as “scam,” “rip-off,” or “complaint.” Check to see if the dealer is the subject of complaints filed with the state attorney general or local consumer protection organizations. If you are a victim of auto sales fraud, you can contact your state attorney general or local consumer protection agencies. You can also contact the FTC online at www.ftc.gov/complaint or by phone at 1-877-FTC- HELP.


48TH ANNUAL HAMPTON JAZZ FESTIVAL JUNE 26-28, 2015 at The Hampton Coliseum 25TH ANNUAL AFRIKAN AMERICAN FESTIVAL JUNE 26-27, 2015 at Mill Point Park ABERDEEN GARDENS HERITAGE DAY JUNE 27, 2015 at Aberdeen Gardens Historic Museum 24TH ANNUAL SCHOLARSHIP GOLF TOURNAMENT JUNE 27, 2015 at The Woodlands Golf Course.


Hampton Roads Convention Center


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