Ohio Auto Dealers Settle FTC Deceptive Advertising Charges

Ohio Auto Dealers Settle FTC Deceptive Advertising Charges
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November 30, 2015

Two Ohio auto dealers have agreed to settle Federal Trade Commission (FTC) charges that they deceived consumers with advertisements that touted low monthly car lease payments but failed to disclose key terms of the offers.

The FTC's administrative complaint claims that Progressive Chevrolet Company and Progressive Motors Inc., of Masillon, Ohio, failed to properly disclose terms such as the total amount due at signing, whether a security deposit was required, and credit score requirements.

According to the agency, typical consumers could not qualify for the advertised terms. They are charged with violating the FTC Act and the Consumer Leasing Act and Regulation M.

Progressive Chevrolet Company, also does business under several names, including Progressive Auto Group, Progressive Jeep, and Progressive Chrysler, and Progressive Motors Inc., also does business as Progressive Ram and Progressive Chrysler Jeep Dodge Inc.

The proposed settlement order, which will remain in effect for 20 years, prohibits the respondents from advertising misleading lease or financing terms. It also requires them to clearly and conspicuously disclose all qualifications or restrictions on a consumer's ability to obtain the advertised terms. If the ad states that consumers must meet a certain credit score in order to qualify for the offer and a majority of consumers are not likely to meet the stated credit score, the ad must clearly and conspicuously disclose that fact.

The respondents are also barred from advertising a payment amount, or that any or no initial payment is required, without clearly disclosing that the transaction is a lease, the total amount due at consummation or delivery, the number of payments and their amounts and timing, whether or not a security deposit is required, and that there may be an extra charge at the end of the lease where the consumer's liability (if any) is based on the difference between the vehicle's residual value and its value at the end of the lease.