Christopher Mufarrige, director of the Federal Trade Commission’s Bureau of Consumer Protection
Greenway Automotive Group has agreed to settle litigation filed by the Federal Trade Commission (FTC) alleging that five central Florida dealerships deceived customers by charging them thousands of dollars more than their advertised prices.
But the proposed settlement of the lawsuit filed in the Central District of Florida does not include any damages awards or compensation for individual customers of the dealerships in Orlando and Jacksonville. The FTC complaint about the Greenway dealers’ practices says customers were charged on average more than $3,350 above the advertised price in more than 92% of sales.
The lawsuit alleged violations of the Federal Trade Commission Act because numerous administrative fees, dealer fees, delivery fees and processing fees were tacked on to consumers’ bills during the dealers’ transactions. Some of the advertised prices for vehicles also were based on rebates and discounts that were available to only a “subset” of consumers, according to the FTC.
“Defendants have deceptively advertised false prices and hidden the actual price to purchase their vehicles by misrepresenting advertised prices, in violation of Section 5 of the FTC Act,” the FTC lawsuit states. “... Defendants’ conduct distorts the competitive process by impeding consumers’ ability to make informed choices. Through these deceptive practices, Defendants unlawfully take advantage of consumers and competitors alike.”
In a statement emailed to the Florida Record, Greenway expressed satisfaction about the resolution of the dispute and said it respected the federal agency’s consumer-protection obligations.
“Under the agreement, Greenway pledges to make the most prominent price in vehicle advertising the full price a customer pays, excluding only taxes and other government charges,” the company’s statement says. “Greenway takes that requirement seriously. We believe this is a great win for customers and believe all dealerships should similarly take this step.”
The statement also emphasized that the dealerships did not admit liability for the conduct alleged in the complaint and that the dealerships were not required to provide any monetary compensation.
The settlement enjoins the dealerships from deceptive advertising practices and requires the company to be transparent in its pricing in the future. It also bars defendants from sending “deceptive prize mailers” to potential customers, according to the FTC.
The federal agency’s lawsuit also alleged that Greenway lured customers into its dealerships by sending out mailers saying that they won thousands of dollars in cash prizes. But those prizes turned out not to be real, FTC reported.
“Truthful advertising in the auto industry is vital because purchasing a car is one of the most significant financial decisions consumers make,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in a prepared statement. “Consumers can’t make informed choices when the actual price is hidden. Price transparency is critical to a properly functioning market and is a top priority for the Trump FTC.”
The Greenway dealerships are also required to maintain records involving sales, leases, personnel and accounting that may bear on the terms of the agreement.
The FTC expressed concerns about the misleading dealership ads in an advisory letter in March, but the practices in question continued, according to the FTC.
Credit: Federal Trade Commission
