Va. MVDB cautions dealers generally on Internet ads and licensing, and specifically with ongoing issue with TrueCar

Va. MVDB cautions dealers generally on Internet ads and licensing, and specifically with ongoing issue with TrueCar

Virginia dealers were reminded this week by the Motor Vehicle Dealer Board (MVDB) that dealers are responsible for all advertisements for motor vehicles, including all Internet advertising. MVDB said that Internet advertisements, including videos and YouTube postings, must adhere to the same advertising guidelines as print and television and that all dealers advertising by Internet should review their ads carefully. In issuing this warning, MVDB noted that it is finding many Internet ads that are not in keeping with Virginia law.

As reported earlier, TrueCar came back before the Board to make the case that their business model complied with motor vehicle sales licensing laws and once again was found not to be in compliance. MVDB then reminded dealers that employees and others operating on the dealers behalf in the sales process, including TrueCar, needed to be licensed. Specifically, anyone who quotes price, discusses features and otherwise engages in the solicitation of a motor vehicle with a potential customer must have a sales license. This includes Internet team members. MVDB pointed out that if Internet employees are quoting prices to consumers who have submitted an inquiry online, those representatives must be licensed. A rep, on the other hand, who is merely greeting the customer and/or offering to set-up an appointment or forward the customers information to a licensed salesperson, does not require a license, MVDB said.

Last January, MVDB told TrueCar that its business model had people selling cars without a license, in violation of the law. At the same time, Virginia dealers were told that if they were working with TrueCar under those circumstances they faced regulatory reprisals going forward. And given MVDBs review of TrueCars business model last week, this continues to be the case.

In regulatory action last week from the federal level, dealers nationwide were cautioned to take notice of a Federal Trade Commission (FTC) settlement with five dealers from different areas of the country that requires them to stop running ads in which the dealers promised to pay off a consumer’s trade-in no matter what the consumer owes on the vehicle. FTC said that despite the dealers’ claims, consumers still would be responsible for paying the difference between the tradein loan balance and the vehicle’s value. It said that the dealers’ representations that they would “pay off” what the consumers owed were false and misleading and violative of FTC advertising regulations.