Legal trends to watch for in 2016: FTC oversight
This is the second in a series of articles highlighting the legal trends that dealers should watch for in 2016. This one focuses on Federal Trade Commission enforcement of its consumer protection laws.
1. FTC advertising oversight will continue. The FTC has used its increased authority and budget to regulate auto dealers to police advertising. That will continue for the rest of 2016. Those in charge of dealer advertising, therefore, need to be up to speed on FTC rules.
a. When advertising credit or leasing, a dealer should use follow-on disclosures after a trigger terms, as required by TILA and the Consumer Leasing Act.
b. Avoid bait-and-switch advertising. Advertised vehicle prices net of incentives or rebates of limited availability should disclose clearly and conspicuously the qualifications for the programs.
c. Zero money down leases must truly require no up-front dollars.
2. The FTC will increase its emphasis on data protection and prevention of identity theft under its Safeguard Rule. The FTC won a significant victory in federal court in 2015 on its Safeguard Rule. The decision allows the FTC to charge a business with unfair trade practices for failing to protect private customer information.
a. Dealers must ensure their programs under the FTCês Information Safeguard Rule are updated regularly. It is imperative that customer information does not walk out the door with departing salespeople.
b. Update your policy under the FTC Red Flags Rule annually. The dealership will be the biggest victim in an identity theft scenario!
Thanks to attorney and Kindred-Line member Michael Charapp of Charapp & Weiss, LLP, for providing this information.Download Bulletin PDF