- with readers working within the Consumer Industries industries
Last week, the Federal Trade Commission announced that it sent letters to ninety-seven auto dealership groups, warning them about their pricing practices. Specifically, the FTC warned them that the advertised price must be the total price that consumers are required to pay – and that the advertised price should include all mandatory charges (excluding required government charges, like taxes).
In the letter, the FTC gave examples of what it says are illegal pricing practices, such as:
- Advertising a price that does not include all required fees;
- Advertising a price that reflects rebates or discounts that are not available to all consumers;
- Advertising a price that fails to take into account the amount of an additional required down payment;
- Conditioning an advertised price on consumers using dealer financing;
- Requiring consumers to buy additional items that are not reflected in the advertised price; and
- Advertising unavailable or nonexistent vehicles.
In announcing the action, FTC's Bureau of Consumer Protection Director Christopher Mufarrige said, "The Trump-Vance FTC is committed to preventing auto dealers from misleading consumers with low advertised prices and then adding on mandatory fees at the end of the purchasing process. The FTC will remain focused on monitoring auto dealerships to ensure that the market functions efficiently and competitors are transparently competing on price."
Even though the FTC's Rule on Unfair or Deceptive Fees, which took effect in the middle of last year, is limited to advertising for live-event ticketing and short-term lodging, in its warning letters here, the FTC takes the position that all-in pricing is required by the FTC Act.
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