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Two major automobile manufacturers and five St. Louis, Missouri-area dealerships have signed agreements with the Federal Trade Commission to end alleged practices of omitting or burying key cost information in small and at times unreadable print in their lease advertisements. The settlement agreements -- signed by Toyota Motor Sales, U.S.A., Inc.; Volkswagen of America, Inc. (including its Audi of America division); Lou Fusz Automotive Network, Inc.; Frank Bommarito Oldsmobile, Inc.; Suntrup Ford, Inc. and Suntrup Buick-Pontiac-GMC Truck, Inc.; and Beuckman Ford, Inc. -- follow on the heels of other FTC law-enforcement actions against five major auto manufacturers and a number of dealerships for misrepresenting, hiding, or failing to adequately disclose the terms of their advertised automobile lease deals.

"Our campaign to clean up auto lease advertising so far has netted substantial, tangible results in making essential cost information both readable and understandable for consumers," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "Many manufacturer ads now state a 'total amount due at lease inception' instead of just a 'low down payment' amount, and there have been improvements in dealer advertising as well. Because accurate cost information is so essential to consumers, we will continue to monitor ads by manufacturers, dealers, and others who should be providing that information."

The FTC's cases allege violations of federal laws and regulations that require lease and credit advertising containing certain "triggering" terms -- such as down payments or monthly payments -- to disclose clearly and conspicuously certain other essential "triggered" terms of the deal. The Consumer Leasing Act (CLA) and its implementing Regulation M, which govern lease transactions, require that ads for leasing plans that contain a triggering term also state clearly and conspicuously additional terms of the offer including, among other things, that the transaction advertised is a lease; the total amount of any payments such as a security deposit or capitalized cost reduction required at lease inception; and the number, amount and timing of scheduled payments. The complaints against the five St. Louis dealerships also allege violations of the Truth in Lending Act (TILA) and its implementing Regulation Z which require that ads for financed purchase plans using a triggering term also state clearly and conspicuously the amount or percentage of the down payment, the terms of repayment, and the Annual Percentage Rate (or APR), which is a measure of the true cost of the financed purchase. These laws and regulations are designed to ensure that consumers are provided full, accurate, and understandable information about lease and credit offers.


The complaints against Toyota and Volkswagen allege that the companies' lease advertisements have violated Section 5 of the Federal Trade Commission Act (FTC Act) by misrepresenting that consumers could lease the advertised vehicles at the terms prominently stated in the ads, such as the attractive low monthly payment amount and the amount stated as "down." In fact, consumers were required to pay significant additional fees beyond those prominently stated terms, such as a capitalized cost reduction, first month's payment, and/or security deposit to lease the advertised vehicles. The complaints also allege that these manufacturers failed to disclose adequately essential terms required by Section 5 of the FTC Act, the CLA, and Regulation M.


The FTC's complaints against Lou Fusz, Bommarito, and the two Suntrup dealerships allege that these dealers' lease advertisements have violated Section 5 of the FTC Act by misrepresenting the amount that consumers must pay in inception fees with statements such as "0 Down," "No Money Down," and "No Payment til April" (respectively). In fact, consumers were required to pay substantial amounts at lease inception to lease the advertised vehicles. The FTC's complaints against all five of the dealers allege that they violated Section 5 of the FTC Act by failing to disclose adequately such substantial fees. The FTC also alleged the following Section 5 violations in specific complaints:

  • that Lou Fusz falsely represented that cars were available for leasing at the advertised terms when that was not generally true;
  • that Lou Fusz misrepresented that its "one payment" plan meant consumers could lease a car by making equal monthly payments for a specified term when, in fact, the total amount of all the payments was due at lease inception; and
  • that Beuckman, in using the abbreviation "RCL" for Red Carpet Lease, failed to disclose adequately that the transaction being advertised was a lease.

The challenged lease advertising also allegedly used triggering terms under the CLA and Regulation M but omitted other important and required ("triggered") information.

As for financed purchase (credit) advertising, the FTC alleged that Bommarito, through its SmartBuy program, violated Section 5 of the FTC Act by falsely representing that consumers could buy cars for the advertised terms, when in fact consumers also had to pay a final undisclosed balloon payment of several thousand dollars.

The FTC alleged that all five dealers' credit ads used "trigger terms" under the TILA and Regulation Z yet omitted or failed to disclose clearly and conspicuously required ("triggered") information. Suntrup, according to the FTC complaint, also violated the TILA and Regulation Z by failing to disclose the finance charge as an APR, a key term in helping consumers compare the true costs of financed purchase plans.


The consent agreements negotiated by the FTC to resolve these charges are being announced today for public comment before the Commission determines whether to issue them as final.

Under the consent agreements with Toyota and Volkswagen, the respondents would be prohibited from misrepresenting the total amount due at lease signing. In addition, these manufacturers' ads that state any charge that is part of the amount due at lease signing or that no such charge is required (not including a statement of the periodic payment) also would be required to state with equal prominence the total amount due at lease signing. The manufacturers also would be required to comply with the requirements of Regulation M in their lease advertising.

The St. Louis dealers would be prohibited from misrepresenting costs of leasing, including the total amount due at lease signing. Like the orders against Volkswagen and Toyota, these dealers' ads could not state any amount due at lease inception or that no such amount is required (except for the statement of a periodic payment) unless the advertisement also states with equal prominence the total amount due at lease inception. As in the manufacturers' agreements, this equal prominence requirement is separate and apart from the advertisers' obligations to make certain disclosures clear and conspicuous. Nor could the dealers, under the orders, violate the advertising provisions or any other provision of the CLA and Regulation M.

The order against Lou Fusz would enjoin the company from misrepresenting the type of transaction advertised, including the fact that the offer is for a one payment lease. It also would enjoin Lou Fusz from advertising that a specific offer is available unless the company usually and customarily offers to lease vehicles at the advertised terms. The order against Beuckman would prevent the company from stating the term "RCL" without disclosing clearly and conspicuously that such term refers to a lease transaction.

To remedy the dealers' alleged law violations through their credit advertising, the orders would prohibit them in the future from violating any provision of the TILA and Regulation Z, including such laws' advertising requirements.

To remedy Bommarito's alleged violations of Section 5 in its credit advertising, the order would prohibit future misrepresentations of the terms of financing a vehicle, including the amount of any balloon payment. In addition, Bommarito would be required to include the amount of any final balloon payment prominently and in close proximity to certain advertised claims.

In addition to binding the St. Louis dealers as corporate entities, the FTC's orders would bind the following individual principals of the corporations: Louis J. Fusz, Jr., Frank J. Bommarito, Thomas Suntrup, and Fred J. Beuckman, III. Toyota is based in Torrance, California, and Volkswagen is based in Auburn Hills, Michigan.

The staff of the Missouri Attorney General's office assisted FTC staff in the investigation of the St. Louis auto dealers.

The Commission vote to announce these proposed consent agreements for public comment was 4-0. Announcements regarding the proposed consent agreements will be published in the Federal Register shortly. The agreements will be subject to public comment for 60 days, after which the Commission will decide whether to make them final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Copies of the complaints, consent agreements, analyses of the agreements to assist the public in commenting, FTC brochures for consumers in the market for a new car -- "Look Before You Lease," and "New Car Buying Guide" -- FTC brochures for businesses -- "Advertising Consumer Leases" -- as well as information about prior FTC cases involving lease and finance advertising issues, are available from the FTC's web site at and also from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. Consent agreements subject to public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

FTC File Nos.:

Toyota -- 952 3098
Volkswagen -- 972 3141
Fusz -- 952 3204
Bommarito -- 952 3202
Suntrup Ford -- 952 3200
Suntrup Buick-Pontiac-GMC -- 952 3201
Beuckman -- 952 3207

Contact Information

Media Contact:
Bonnie Jansen
Office of Public Affairs
202-326-2161 or 202-326-2180
Staff Contact:
David Medine
Bureau of Consumer Protection