FTC's Final Vehicle Shopping Rule
NADA legal eagles, Bradley Miller and Dan Ingber, break down recent government shifts set to directly impact dealer operations most — the FTC’s CARS ruling.
5 Minutes of Fresh Perspective
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Rapid and dramatic technology evolution gets a lot of spotlight in the ongoing auto industry conversation. NADA's Legal and Regulatory Affairs specialists Bradley Miller and Dan Ingber turned our attention toward the changes at the government level poised to affect how dealers do business directly.
What It Means for You:
- Effective Date on Hold: Originally set for July 30, 2024, but now paused. Stay tuned for updates!
- Hefty Fines: Violations could cost you a staggering $51,744 each. Ouch!
- Preemption of State Law: If state laws clash with the FTC rule, the federal rule takes precedence. Keep a close eye on this!
Requirements to Keep in Mind
- No Misrepresentations: 16 no-gos you need to avoid. Transparency is your new best friend.
- Transparent Offering Prices: Must be upfront in ads and the first response to a customer. No hidden fees!
- Monthly Payment Disclosures: Be crystal clear about total costs and payment terms.
- Express Informed Consent: Mandatory for any charges. Make sure your customers know exactly what they're paying for.
- Beware of Valueless Products: Don't get caught selling something that offers no real value to the consumer.
Data Security Just Got Real
- Amended Safeguards Rule: A data breach affecting 500+ consumers? You've got 30 days to report it to the FTC.
- Public Database of Reports: All reports will be accessible, so ensure your data security is top-notch.
Lead Generation and Communications: Tread Carefully
- FCC's Lead Generation Order: Compliance with DNC protections for texts and stricter consent requirements for robocalls and robotexts is necessary.
Potential Non-Compete Rule and Testimonial Scrutiny
- Non-Compete Agreements: A proposed rule could change how you use them. Keep an eye out!
- Endorsements and Testimonials: The FTC is watching for deceptive practices. Ensure transparency and honesty in all your testimonials.
Action Plan for Dealers:
- Review and Adapt: Examine your current practices against these new rules. Where do you need to adjust?
- Stay Informed: These regulations are evolving. Keep abreast of updates to stay compliant.
- Seek Guidance: Don't navigate these waters alone. Legal and compliance advice can be invaluable.
- Embrace Transparency: Build trust with your customers by being upfront and transparent in all your dealings.
Compliance is a poor substitute for love, but we trust the work NADA is doing will ease the burden on consumers and dealers while also working to push out operators who burden the whole retail auto industry by perpetuating negative stereotypes — a true win for everyone.