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September 14, 2022

ATTORNEY GENERAL RAOUL URGES FTC TO STRENGTHEN RULES TO PREVENT CONSUMER HARM, MISREPRESENTATIONS IN CAR SALES

Automobile Issues Regularly Top Consumer Complaints to Raoul’s Office

Chicago  — Attorney General Kwame Raoul joined a coalition of 18 attorneys general calling on the Federal Trade Commission (FTC) to adopt and strengthen guidance on automobile sales. Complaints related to car sales are consistently among the most frequent Attorney General Raoul’s office receives.

In a comment letter, Raoul and the attorneys general express support for the FTC’s proposed updates to the Motor Vehicle Dealers Trade Regulation Rule related to the sale, financing and leasing of motor vehicles by dealerships. The proposed rule, published July 13 in the Federal Register, would provide states with a critical tool to address misrepresentations and prevent consumer harm.

“Buying a vehicle can be the one of the most expensive, and often necessary, purchases consumers make. People have a right to clear and accurate information before making such a significant investment,” Raoul said. “Complaints related to automobile sales have long been some of the most frequent my office receives. The FTC’s proposed standards will provide clear standards, increase transparency and ultimately help states better protect consumers from misleading or deceptive sales tactics.”

Historically, complaints regarding automobiles have comprised a significant portion of the consumer complaints received by attorneys general. In 2021 alone, the Illinois Attorney General’s Consumer Protection Division received 1,581 complaints related to the sales of new or used vehicles. Consumer complaints related to the sale of new and used automobiles have been in the Top 10 highest complaint category each year Attorney General Raoul has been in office.

The FTC’s proposed rule is a necessary step in combatting unfair and deceptive acts in the vehicle marketplace. It aligns with existing guidance from industry trade groups, as well as state laws and regulations.

The proposed rule would:

  • Prohibit motor vehicle dealers from making certain misrepresentations in the course of selling, leasing or arranging financing for motor vehicles.
  • Require accurate pricing disclosures in dealers’ advertising and sales discussions.
  • Require dealers to obtain consumers’ informed consent for certain charges.
  • Require transparency about add-on products and their pricing.
  • Prohibit the sale of any add-on product or service that has no benefit to the consumer.
  • Require dealers to keep records of advertisements and customer transactions.

While these updates will enhance the ability to protect consumers from unfair and deceptive practices, Raoul and the coalition are offering suggestions to further strengthen the rule:

  • Require price disclosures in writing regardless of the form of the customer’s inquiry.
  • Require that price disclosures include complete information on the cost to purchase or finance the sale of a vehicle.
  • Require written disclosures and written consumer consent before the purchase of any optional add-ons.
  • Require auto dealers to retain records on all contracts for the duration of the contract.
  • Set a time limit for dealers to pay off the lien on any traded-in vehicle to protect consumers and ensure a fair marketplace.
  • Regulate the use of starter-interrupt devices to encourage safety and transparency.

In their letter, Raoul and the attorneys general thank the FTC for addressing a lack of transparency in the current Motor Vehicle Dealers Trade Regulation Rule. According to the coalition, the final rule would enhance protections for consumers and ensure a more competitive and equitable marketplace.

Illinois Attorney General Raoul was joined by the attorneys general of California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Iowa, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island and Washington.

Individuals who need to file a complaint related to auto sales, leases, financing or other vehicle issues should file a complaint on Attorney General Raoul’s website.

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