Remember when your teacher told you to put all books and materials away because a pop quiz was coming? The Federal Trade Commission sort of did the same thing recently to dealerships.
The FTC, working jointly with 12 partner agencies in seven states, conducted the first compliance sweep of dealerships since the amended Used Car Rule took effect earlier this year.
Under the amended rule, the regulator reiterated that dealers must display a revised window sticker called a “Buyers Guide,” which contains warranty and other important information for consumers, on each used vehicle they offer for sale.
The compliance sweep was conducted between April and June in 20 cities nationwide. The FTC said inspectors found Buyers Guides on 70 percent of the more than 2,300 vehicles inspected, with almost half of those displaying the revised Buyers Guide.
Of the 94 dealerships inspected, officials found that 33 had the revised Buyers Guide on more than half of their vehicles, and 14 had revised Buyers Guides on all of their used vehicles.
Following the sweep, the FTC said it sent letters to each dealership detailing the results of the inspections and providing material to help them come into full compliance with the amended Rule.
Over the coming weeks, the regulator indicated that dealerships that were not displaying the revised Buyers Guide can expect follow-up inspections to ensure they have brought themselves into compliance with the amended rule.
Under the FTC Act, dealers who fail to comply face penalties of up to $41,484 per violation. State and local law enforcement agencies also enforce the recently amended rule.
Through this sweep, the FTC and its partners inspected dealerships in seven states:
— California: Burbank, North Hollywood, Richmond, San Bruno, San Jose, San Pablo and Van Nuys
— Florida: Jacksonville
— Illinois: Chicago
— New York: New York (Queens)
— Ohio: Brooklyn Heights, Cleveland, East Cleveland and Cleveland Heights
— Texas: Arlington, Dallas and Grand Prairie
— Washington: Lakewood, Puyallup and Tacoma
To recap, back on Nov. 18, 2016, the FTC amended the Used Car Rule. Under the amended Rule, as of Jan. 28, dealers are required to display a revised Buyers Guide on all used vehicles they offer for sale. The revised Buyers Guide:
• Changes the description of an “As Is” sale
• Places boxes on the face of the Buyers Guide that dealers can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available
• Provides a box that dealers can check to indicate that an unexpired manufacturer’s warranty applies
• Adds air bags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles
• Adds a statement that directs consumers to obtain a vehicle history report and to check for open recalls
• Adds a statement, in Spanish, to the English-language Buyers Guide, advising Spanish-speaking consumers to ask for the Buyers Guide in Spanish if the dealer is conducting the sale in Spanish
• Provides a Spanish translation of the statement that dealers may use to obtain a consumer’s acknowledgement of receipt of the Buyers Guide
The FTC thanked the following partners for their assistance in the current compliance sweep, including:
— California Department of Motor Vehicles Inspection Division
— Contra Costa County Office of the District Attorney
— Los Angeles County District Attorney’s Office
— Santa Clara County Office of the District Attorney
— San Mateo County Office of the District Attorney
— Florida Bureau of Dealer Services
— Cuyahoga, Ohio, County Department of Consumer Affairs
— Ohio Bureau of Motor Vehicles
— City of Chicago Department of Business Affairs and Consumer Protection
— New York City Department of Consumer Affairs
— Texas Department of Motor Vehicles
— Washington State Office of the Attorney General