NADA Monthly Dealer Operations Commentary

NADA Monthly Dealer Operations Commentary

Web Site Advertising: Disclosure and Compliance Issues

According to NADA Data 2002, more than 90 percent of new-car and truck dealerships have web sites. Chances are excellent that you have a web site. Does your web site meet federal advertising requirements?

The same rules that govern print and broadcast advertising apply to internet advertising, and the Federal Trade Commission (FTC) enforces consumer protection laws online as well as off. It is wise to review your web site annually, with legal counsel, to ensure that it complies with the following:

Regulation Z of the Truth in Lending Act requires certain disclosures about the terms of a consumer credit sale.

Regulation M of the Truth in Leasing Act requires certain disclosures about consumer lease transactions.

The FTC Act mandates that advertisements must be truthful and not misleading from a consumerês perspective.

The FTC requires that advertisers identify all express and implied claims triggering claims conveyed by their advertisements. Advertisers must determine which claims might need qualification and what information should be provided in a disclosure.

All disclosures must meet the clear and conspicuous standard, and they must be legible and reasonably understandable as perceived by a reasonable consumer. The FTC has issued guidance on meeting the clear and conspicuous standard; read its publication, Dot Com Disclosures, at www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/index.html.

Many principles of advertising law apply to online ads, but new issues arise as fast as technology develops. Using Dot Com Disclosures as an integral part of your yearly look at your web site will ensure that you meet all guidelines.

This information was excerpted from NADA Management Education Bulletin L.39, Web Site Advertising: Disclosure and Compliance Issues, which NADA members have received. For additional copies (priced at $2.50 for members and $5.00 for nonmembers), visit NADA online catalog at www.nada.org/mecatalog or call 800-252-6232, ext. 2 or 703-821-7227.