Skip to main content

Here’s something likely to make consumers start firing on all cylinders: receiving an “URGENT RECALL NOTICE” in the mail with a “warning” that their vehicle “may be under an important factory/safety recall.” But according to an FTC lawsuit against the Passport group of car dealerships in the Washington, D.C., area, the vast majority of people who received those notices didn’t have a vehicle subject to an open recall. The complaint offers object lessons about a marketing campaign that took a seriously wrong turn, resulting in settlements with the dealerships, Passport’s president and vice president, a marketing firm, and the firm’s CEO.

In 2014, the National Highway Traffic Safety Administration standardized the format of official safety recall notices that manufacturers send to owners. NHTSA says one reason for the distinctive label – white capital letters on a bright red background – is to “help protect consumers from misleading sales and marketing materials that mimic, in their wording and presentation, legitimate safety recall alerts from manufacturers.”

Deceptive recall notice sent by car dealershipAccording to the FTC, in November of that year, California-based Temecula Equity Group, also known as, a direct mail and digital marketing firm that regularly works with members of the auto industry, approached Passport with a sample promotion: a bright red mailer with white capital letters announcing an URGENT RECALL NOTICE. With Passport’s approval, Overflow added Password’s name and address to a template and sent the card to 6,920 Toyota owners who lived nearby. As the complaint alleges, the defendants didn’t act in response to a specific Toyota recall and made no effort to send the mailing only to consumers whose cars were being recalled.

The FTC says the purpose of the promotion was to boost business, not to alert owners to necessary recalls. When consumers who received the notice began to contact the dealerships, the complaint alleges that a Passport service manager directed service coordinators to “just schedule these customers with an appointment. Do not worry about if there really is a recall or if we have parts.”

Ultimately, Passport started to get complaints from consumers and – in the words of Passport’s vice president – “a ton of heat from Toyota.” But despite that heat, the VP allegedly remarked to other Passport managers that the promotion had generated “410 unique callers.” Nor did the heat dissuade the company from continuing to use similar tactics. You’ll want to read the complaint for details of another mailing of those “urgent recall notices” to 14,491 Nissan owners in the area. In that promotion – the genesis of which was a Nissan “voluntary service campaign,” not a recall – the FTC says the majority of consumers who got the notice didn’t have a vehicle subject to the campaign, let alone subject to an open safety recall.

That promotion led to an email from Passport’s Director of Customer Care to the company’s call center staff that said, “THESE MAILERS ARE NOT SPECIFIC RECALLS. THESE MAILERS WERE DESIGNED TO CULTIVATE BUSINESS AND GET THE PHONE TO RING. The idea is to stimulate an inquiry and, in the process, provide us with the opportunity to ‘discover’ an open recall on their vehicle.”

The FTC complaint charges that the defendants represented that people who received the notices had vehicles that were subject to an open safety recall – a claim that in many instances was flat-out false. The proposed settlements with the Passport dealerships, company president Everett A. Hellmuth III, vice-president Jay A. Klein,, and its CEO Jeffrey R. Bush prohibits any misrepresentation about whether a vehicle is subject to an open safety recall or service campaign or any other misrepresentation regarding a material fact about a vehicle’s safety, recall status, or servicing.

What points should this case drive home to other businesses?

Don’t depend on an “Inc.” to shield individuals from liability. There are lots of good reasons to incorporate your business, but sidestepping FTC enforcement isn’t one of them. In appropriate circumstances, the FTC can name individual corporate officers in their individual capacities. The settlement with Passport’s president and vice president illustrates that principle, as does the action against Overflow’s CEO.

Attention marketing professionals: Truth in advertising applies to you, too. The scope of the FTC Act is broad. Depending on the facts, ad agencies and marketing firms may be responsible for their role in campaigns that violate the law.

Put the brakes on any promotion that deceptively implicates recalls or safety. The safety recall system is in place for one reason: to save lives. Marketing materials that mimic the look of recall notices harm consumers because they can sow the seeds of skepticism about real recalls. Car owners should take action when they receive recall notices from manufacturers. And dealerships are encouraged to look out for their customers by helping to spread the word about legitimate recall campaigns. But exploiting consumers’ safety concerns to “cultivate business and get the phone to ring”? That’s a double yellow line no dealer should cross.

It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.

The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.

  • We won’t post off-topic comments, repeated identical comments, or comments that include sales pitches or promotions.
  • We won’t post comments that include vulgar messages, personal attacks by name, or offensive terms that target specific people or groups.
  • We won’t post threats, defamatory statements, or suggestions or encouragement of illegal activity.
  • We won’t post comments that include personal information, like Social Security numbers, account numbers, home addresses, and email addresses. To file a detailed report about a scam, go to

We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.

October 10, 2018
This is how dealerships loose their licences with Nissan.
anna lyman
October 30, 2018
Great article.
Bill Garcia
February 03, 2019
Is it illegal for Auto Dealers to add a service offer or coupon on a recall notification postcard mailer?
November 09, 2019
I was sick with worry on a emissions recall until I looked up nhtsa and saw the distinct label which my notice did not have. So stressful

Get Business Blog updates