Attorney General Settles with Dealer and Ad Firm for Deceptive Auto Marketing

On October 29, 2007 the Washington Attorney General announced settlements with an auto dealer and an advertising firm accused of using deceptive promotions to sell cars.

The settlements resolve allegations that the defendants advertised cars without disclosing all the terms, including how many vehicles were available at a specific price; that they suggested that financing could be guaranteed regardless of a consumer's credit history; and used "simulated checks" and contest promotions to mislead consumers.

According to the complaint, the defendants sent ads that offered misleading prices and made it appear that the cars were substantially discounted. They also allegedly charged undisclosed fees and advertised vehicle lease and financing terms without all mandated disclosures. Some promotions were sent in envelopes labeled "OPEN IMMEDIATELY - TIME DATED MATERIAL" that resembled official certified mail. Other mailers looked like checks and included the words "PAY TO THE ORDER OF" but were actually ads. And some vehicle ads included statements such as "credit problems - no problem."

Under the settlement terms, the defendants are prevented from doing any of the following:
* Misrepresenting the number of vehicles offered at an advertised price,
* Generating ads that create a false sense of urgency or that guarantee credit or a minimum trade-in value,
* Using words, phases or initials in ads that aren't easily understood by consumers or using a font size that's difficult to read,
* Collecting a vehicle documentary fee without disclosing that it will be added to the sale price,
* Failing to state the odds of a winning a prize and the value of that prize, or
* Failing to include other required disclosures or clearly stating vehicle sale prices in ads.
Bruce Titus Automotive Group and its president, Bruce Titus, will pay $5,000 in civil penalties plus $30,000 in attorneys' fees and legal costs. An additional $5,000 in civil penalties was suspended provided they comply with the settlement terms.

Level 10 and David Bottner, in his capacity as president, will pay $15,000 in attorneys' fees and legal costs. They also agreed to pay $10,000 in civil penalties, suspended provided they comply with the settlement terms.

Impact on Ad Agencies

This case highlights the importance that an advertising agency conduct due diligence regarding the campaigns it is working. Regulators are going after marketers as well as advertising agencies regarding illegal offers or deceptive marketing. This is not the first time the Washington Attorney General went after an advertising agency for work performed for a client. In August 2007 the AG filed suit against Automotive Consultant Group for similar violations.

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