WASHINGTON, Nov. 9, 1999 -- Two St. Louis car dealerships will
pay a $40,000 civil penalty for alleged violations of a Federal
Trade Commission order related to the Consumer Leasing Act ("CLA")
and the Truth In Lending Act ("TILA").
The penalty is the first ever collected by
the FTC for such an order violation by a vehicle dealership or
individual dealership officer.
Under the consent decree, Thomas Suntrup,
Suntrup Buick-Pontiac-GMC, and Suntrup Ford, Inc. will pay the
penalty to resolve allegations that they did not conform their
advertising practices to the CLA and the TILA, despite agreeing to do so
in a 1998 consent order with the Commission.
"When consumers are shopping for cars,
they ought to have confidence in the information they're getting from
ads," said Jodie Bernstein, Director of FTC's Bureau of Consumer
Protection. "By helping to ensure that the all-important 'fine'
print is readable, this action puts consumers in the driver's seat when
they're negotiating their deal."
The Commission said Suntrup's vehicle
leasing ads stated the amount of any payment or that any or no initial
payment was required at lease inception, but failed to disclose
"clearly and conspicuously" required financial information,
including the total amount due prior to or at lease inception.
Instead, the ads buried this information in
type that was too small, that appeared on the screen for too short a
time, or that was accompanied by distracting sounds or images. In
addition, the complaint alleges that the ads did not disclose whether or
not a security deposit was required.
Further, the complaint alleges that
Suntrup's consumer credit advertising failed to provide consumers with
disclosures required by the 1998 order. For example, one advertisement
offered consumer financing for just "$1 down" without
disclosing the terms of repayment or the annual percentage rate of the
financing.
Under the consent decree, Suntrup, while
not admitting any violations, would pay a civil penalty of $40,000 and
would be required for two years to make the brochure Keys to Vehicle
Leasing available to consumers who visit the dealerships. This
brochure, developed by the Federal Reserve Board, FTC staff, industry
representatives, and consumer groups, explains, in simple terms, the
costs of vehicle leasing and the mechanics of a lease transaction.
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