No one likes a tattletale, especially car dealers that don't follow the rules. But the Federal Trade Commission is eager to crack down on dealerships that are skirting federal rules as they apply to advertised vehicle prices. Dealerships in general have come under fire in recent years for deceptive practices. The feds are applying some heat, and now, they're trying to apply even more heat... from within the dealership community itself.Ford Dealers Behaving Badly We first wrote about this a month ago, when the FTC issued a warning letter to 97 dealership groups that the "prices they advertise must be the total price – including all mandatory fees – that consumers will be required to pay." The FTC says it will continue monitoring the automotive retail marketplace and take action against non-compliant dealerships if they are identified.Last week, Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, spoke on a dealer webinar about the topic and was asked at the end of it what dealers should do if they know of another dealership nearby that isn't adhering to FTC rules about advertised pricing. Automotive News quotes Mufarrige as saying on the webinar that bait-and-switch price tactics are "diverting traffic away from honest dealerships" that aren't hiding additional fees until the customer is signing on the dotted line.In short, the FTC encourages the good dealerships to help rat out the bad ones. FTC Targeting 'Severe' Problems Antoni Shkraba Studio / Pexels The National Automobile Dealers Association weighed in on the subject last month, saying it takes very seriously potential advertising violations. "We will continue to work with the FTC to address areas of concern,” the organization said, noting that the “overwhelming majority of America's 17,000+ dealers" are compliant in pricing communications.Today, NADA tells CarBuzz its role is to make sure dealers understand the rules to be compliant. But how widespread could the pricing problem extend, beyond the aforementioned 97 dealership groups cited?Subaru"We have no information or nothing leads us to believe that this is a bigger problem than what the FTC has said. They've gone after 97 dealership groups," the organization said. "The FTC has told us that they're going after, really, the cases... where they think the problems are severe... where there's really been misrepresentation."Another topic that came up during the webinar was document fees assessed by dealers, and the FTC wants those displayed prominently in an advertised total price for a vehicle, Mufarrige said. That way, “the consumer understands what it is that they’re going to be paying to get the car out the door,” he said, according to Automotive News.Unlike destination and handling charges, which have been rising recently, these document, or "doc fees," are meant to cover processing expenses and are governed by state law, to ensure compliance with state codes, NADA said. "There are some federal components to it, but it's just the cost of doing the deal."Car dealership personnel who suspect their rivals are not following FTC rules about advertised pricing are encouraged to contact NADA or the FTC. Let car dealer Thunderdome begin.
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