The Federal Trade Commission (FTC) has recently revealed a new consumer protection ruling that intends to combat auto dealership scams.
Auto dealership scams have grown in prevalence, especially over the internet, and the FTC’s ruling will help consumers navigate this murky field of sales. The new regulation will require dealers to clearly disclose their fees and other costs associated with vehicle purchases at the beginning of the transaction, and before the consumer signs a purchase agreement or other contract. This will allow the customer to make a reasonably informed decision about what they are buying and how much it will cost them.
Furthermore, the FTC rule requires dealers to disclose “adequate information” for determining the cost of optional products and services that the consumer may be offered, such as extended vehicle warranties, gap insurance and vehicle tracking systems. Any information that is incomplete, confused or missing entirely will now have to be provided before the customer makes a purchase.
The new FTC rule also prohibits dealer loan markups that are not required by the lender. Loan markups are fees that the dealer adds to the loan without the lender’s knowledge or permission, thereby increasing the amount of interest charged to the consumer. Dealers are now also prohibited from making false or misleading claims related to a credit offer. This means that dealers can no longer advertise a loan’s rate, term, or payment amount without actually being able to provide the offer.
The FTC’s new rule provides a much-needed layer of consumer protection in the auto dealership space. Consumers will now be able to make more informed decisions about their vehicle purchases, and the rule should help to curtail fraudulent or misleading practices. This new regulation is just one of the many steps that the FTC is taking to ensure consumer’s safety in the market. It is hoped that the introduction of such rules will help to create a fair playing field for both buyers and sellers.
The Federal Trade Commission (FTC) has recently revealed a new consumer protection ruling that intends to combat auto dealership scams.
Auto dealership scams have grown in prevalence, especially over the internet, and the FTC’s ruling will help consumers navigate this murky field of sales. The new regulation will require dealers to clearly disclose their fees and other costs associated with vehicle purchases at the beginning of the transaction, and before the consumer signs a purchase agreement or other contract. This will allow the customer to make a reasonably informed decision about what they are buying and how much it will cost them.
Furthermore, the FTC rule requires dealers to disclose “adequate information” for determining the cost of optional products and services that the consumer may be offered, such as extended vehicle warranties, gap insurance and vehicle tracking systems. Any information that is incomplete, confused or missing entirely will now have to be provided before the customer makes a purchase.
The new FTC rule also prohibits dealer loan markups that are not required by the lender. Loan markups are fees that the dealer adds to the loan without the lender’s knowledge or permission, thereby increasing the amount of interest charged to the consumer. Dealers are now also prohibited from making false or misleading claims related to a credit offer. This means that dealers can no longer advertise a loan’s rate, term, or payment amount without actually being able to provide the offer.
The FTC’s new rule provides a much-needed layer of consumer protection in the auto dealership space. Consumers will now be able to make more informed decisions about their vehicle purchases, and the rule should help to curtail fraudulent or misleading practices. This new regulation is just one of the many steps that the FTC is taking to ensure consumer’s safety in the market. It is hoped that the introduction of such rules will help to create a fair playing field for both buyers and sellers.
