FTC Rule Would Make A Special Exception So Car Dealers Can Keep Ripping People Off

FTC Rule Would Make A Special Exception So Car Dealers Can Keep Ripping People Off

The Federal Trade Commission may be excluding car dealerships from its plans to ban junk fees if provisions in a reportedly controversial set of proposed rules targeting dealerships are finalized. According to Automotive News, the FTC’s plan would ban businesses from charging hidden and misleading fees and require them to show the full price upfront.

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The rule would apply to industry and companies broadly, according to the outlet. Those industries include event ticketing, hotels and lodging, apartment rentals, and car rentals. If a company fails to comply, it could face civil penalties and have to refund customers.

Car dealers, on the other hand, would be excluded if the FTC finalizes provisions on offering price and misrepresentation in its Motor Vehicle Dealers Trade Regulation Rule that was proposed back in June of 2022. It also seeks to ban junk fees and bait-and-switch advertising tactics when buying a car.

Auto News says that among the proposed rule’s requirements, dealers would have to disclose an offering price and the out-the-door price before government fees or taxes are applied. A provision prohibiting misrepresentation would – in theory – “bar deceptive practices surrounding, among other things, the total cost, price and added features, other charges, terms and finality of financing and availability of discounts.”

In comments submitted earlier this year to the FTC, the National Automobile Dealers Association argued – rather unsurprisingly – that the junk fee proposal is “overly broad” and that dealers should be excluded because car sales already fall under the proposed Motor Vehicle Dealers Trade Regulation Rule. The association also reportedly said the junk fee proposal could end up conflicting with state and federal regulations like the Truth in Lending Act and the Consumer Leasing Act.

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“The commission must explain how any restriction on dealers resulting from this proposal would be affected by these other existing legal obligations,” Bradley Miller, NADA’s chief regulatory counsel, reportedly wrote.

He continued on, saying that if the Vehicle Shopping Rule isn’t withdrawn, dealers should be exempt from the FTC’s broader junk feel proposal “given that the proposed Vehicle Shopping Rule addresses this type of disclosure in a more comprehensive, and vastly different, manner.”

So, whether it’s from the FTC or the Vehicle Shopping Rule, dealership junk feels may soon be a thing of the past. Blessings to all.