The Federal Trade Commission’s Southwest Region Office recently warned 11 dealerships in Jonesboro, Ark., that their sales practices violate the FTC’s Used Car Rule, which requires dealers to display a “Buyers Guide” detailing warranty and other important information on the vehicles they sell.
Officials recapped that FTC staff inspections in Jonesboro allege that eight dealers failed to display Buyers Guides on almost all used vehicles offered for sale, and three dealers failed to display the guides on a significant number of used units. They continued that 10 dealers properly displayed the guides on all or nearly all of the used vehicles offered for sale.
The FTC sent warning letters urging the 11 dealers to come into compliance by properly displaying the guides in a clear and conspicuous location on all used cars.
“We are glad to see that a significant number of used-car dealers in Jonesboro, Ark., are in substantial compliance with the Used Car Rule by properly displaying Buyers Guides on their used cars offered for sale. We believe these Rule requirements are important to consumers in determining to purchase a used car,” said Deanya Kueckelhan, director of the FTC’s Southwest Region.
“We hope the rest of the Jonesboro’s used-car dealerships will be in full compliance shortly,” Kueckelhan added.
The inspections were part of the FTC’s ongoing efforts to enforce the rule in conjunction with state and local officials. The FTC said it appreciated the assistance of Legal Aid of Arkansas in this matter.
The commission has brought more than 80 actions since the rule took effect in 1985 with civil penalties totaling more than $1 million. The agency noted hundreds of state actions also have been brought to enforce the rule.
The Used Car Rule requires that Buyers Guides be displayed at all times on each vehicle offered for sale, stating:
—Whether the vehicle comes with a warranty and, if so, whether it is a “full” or limited warranty.
—Which systems are covered by the warranty and the duration of the warranty period.
—If it is a limited warranty, what percentage of the cost for covered parts and labor the dealer will pay for.
—Whether the car is sold with no written or implied warranty or, in other words, the car is sold “as is.”
—Whether the car is sold with no written warranty, but with implied warranties. (Some states and Washington, D.C., do not allow dealers to sell vehicles without implied warranties.)
The rule also provides that the Buyers Guide becomes a part of the sales contract and overrides any contrary provisions contained in the contract. It also contains important warnings and suggestions for consumers, such as asking the dealer if they can have a mechanic inspect the vehicle they are considering.
FTC went on to mention the guide warns consumers not to rely on spoken promises, which may be impossible to enforce. Instead, consumers should ask the dealer to put any promises in writing on the guide and in the sales contract.
On Dec. 4, the FTC announced that it is seeking public comment on proposed changes to the Buyers Guide. The FTC is also issuing a final rule that makes technical corrections and revises the Spanish translation of the Guide. The FTC last reviewed and amended the Used Car Rule in 1995.