businessman showing woman leaflet in showroom


Along with doing business under a new presidential administration, car dealers might be experiencing a new regulatory environment for business matters such as financing and advertising. A top federal regulator who was responsible for numerous actions against automobile dealerships is stepping down. Jessica Rich, director of the Federal Trade Commission’s Bureau of Consumer Protection, recently left the agency after 26 years.

During Rich’s tenure, the bureau launched numerous initiatives regarding car sales and the financing arrangements associated with those transactions. No matter which direction the FTC takes going forward, owners and managers of car dealerships need to be cognizant of the potentially harmful effects of:

  • Deceptive advertising — Dealerships have been fined because their advertisements misled potential buyers about the true cost or condition of vehicles. Known as “Operation Ruse Control,” the investigation targeted issues such as photographs showing a vehicle with certain options that were not included in the listed price.
  • Improper loan modifications — Lenders were cited for unlawful trade practices directed at consumers who sought modifications of their car loans. Though people were told that their payments would be lower, expenses from fees, extra interest and extended terms actually put many into a worse financial position.
  • Faulty recordkeeping — Vehicle dealers must follow rules on credit reporting and recordkeeping. A company operating dealerships in Texas and Oklahoma was fined for the failure to maintain written procedures on credit disputes and accounting accuracy.

Keeping up with government requirements and a rapidly changing administrative environment requires skillful guidance from an attorney familiar with the specific concerns of auto dealers.

Pullin, Fowler, Flanagan, Brown & Poe has represented these businesses in lawsuits and regulatory actions involving allegations of fraud, breach of expressed warranty and other types of misconduct. We advise dealerships and other business clients in West Virginia, Ohio and Kentucky. To schedule a consultation, call 304-344-0100 or contact us online.