Two Ohio auto dealers have agreed to settle Federal Trade Commission charges that they deceived consumers with advertisements that touted low monthly car lease payments but failed to disclose key terms of the offers.
The FTC’s administrative complaint alleged that Progressive Chevrolet Company and Progressive Motors Inc., of Masillon, Ohio, failed to properly disclose terms such as the total amount due at signing, whether a security deposit was required, and credit score requirements. According to the agency, typical consumers could not qualify for the advertised terms. They are charged with violating the FTC Act and the Consumer Leasing Act and Regulation M.
Progressive Chevrolet Company, also does business as Progressive Auto Group, Progressive Jeep, and Progressive Chrysler, and Progressive Motors Inc., also does business as Progressive Ram and Progressive Chrysler Jeep Dodge Inc.
The proposed settlement order, which will remain in effect for 20 years, prohibits the respondents from advertising misleading lease or financing terms. It also requires them to clearly and conspicuously disclose all qualifications or restrictions on a consumer’s ability to obtain the advertised terms. If the ad states that consumers must meet a certain credit score in order to qualify for the offer and a majority of consumers are not likely to meet the stated credit score, the ad must clearly and conspicuously disclose that fact.
The respondents are also barred from advertising a payment amount, or that any or no initial payment is required, without clearly disclosing that the transaction is a lease, the total amount due at consummation or delivery, the number of payments and their amounts and timing, whether or not a security deposit is required, and that there may be an extra charge at the end of the lease where the consumer’s liability (if any) is based on the difference between the vehicle’s residual value and its value at the end of the lease.
The Commission vote to issue an administrative complaint and accept the proposed consent agreement was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through December 28, 2015, after which the Commission will decide whether to issue the order on a final basis. Interested parties can submit written comments electronically.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. 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 up to $16,000.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
Office of Public Affairs
FTC’s East Central Region
Jonathan L. Kessler
FTC’s East Central Region