Advertising and Marketing Compliance for Auto Dealers
April 2014
Do your advertising and marketing materials comply with federal and state law? The Federal Trade Commission and the Colorado Department of Revenue, Auto Industry Division, have recently launched initiatives to prosecute dealers who use deceptive or misleading advertising.
Both the Federal Trade Commission (FTC) and the Auto Industry Division have promulgated rules governing dealer advertising and marketing. The dealership personnel responsible for advertising and marketing must be familiar with these rules to avoid compliance issues.
The FTC examines an ad as a whole, and makes a determination whether it is likely to mislead the consumer. The FTC analyzes ads from the perspective of the average consumer, and determines whether any deceptive term is material. The FTC is generally only concerned with the net impression created by an ad, but it is also concerned with compliance with specific advertising rules. In considering fine print, the FTC is concerned with the prominence, presentation, placement and proximity of the fine print in the ad. In addition, specific federal rules must be followed when advertising financial terms or lease terms.
Colorado has promulgated sixteen specific advertising rules dealerships must follow its advertising and marketing materials. One frequently overlooked rule is that any fine print or qualifying language must be in 8 point type. In addition, any advertised price must include the delivery and handling.
You can learn more about advertising compliance by attending a Colorado Auto Dealer Association seminar presented by Michael J. Dommermuth, Fairfield and Woods, P.C., on May 13, 2014, in Denver and Colorado Springs, and May 22 in Grand Junction, Colorado. A brochure for that advertising training is included with this advisory.
This Article is published for general information, not to provide specific legal advice. The application of any matter discussed in this article to anyone's particular situation requires knowledge and analysis of the specific facts involved.
Copyright © 2014 Fairfield and Woods, P.C.,ALL RIGHTS RESERVED.
Comments or inquiries may be directed to: Michael J. Dommermuth