FTC Finalizes CARS Rule

DL
Davis+Gilbert LLP

Contributor

Davis+Gilbert LLP is a strategically focused, full-service mid-sized law firm of more than 130 lawyers. Founded over a century ago and located in New York City, the firm represents a wide array of clients – ranging from start-ups to some of the world's largest public companies and financial institutions.
The FTC remains focused on seeking monetary relief – and will be able to seek civil penalties of up to $50,120 for violations of the CARS Rule.
United States Consumer Protection

Update

The FTC is postponing the effective date of the CARS Rule while a legal challenge brought by the National Automobile Dealers Association and the Texas Automobile Dealers Association is pending.

The trade groups have stated that the rule is "arbitrary, capricious, an abuse of discretion, [and] without observance of procedure required by law," in part because the FTC allegedly failed to reasonably evaluate the costs and benefits of the rule, and failed to show that a significant industry-wide problem exists that would justify the rule.

The Bottom Line

  • The FTC remains focused on seeking monetary relief – and will be able to seek civil penalties of up to $50,120 for violations of the CARS Rule.
  • The CARS Rule goes into effect July 2024, and includes very specific requirements. Companies should ensure that they are prepared to comply.

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