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The Federal Trade Commission (FTC) created a rule last year to help consumers against unfair practices and fees. Known as the Combating Auto Retail Scams (CARS), this was supposed to take effect on July 30th, 2024. Now, lobbyists were able to get this paused indefinitely. This new development of CARS was fought by the National Automotive Dealers Association (NADA) and the Texas Automobile Dealers Association. They filed a petition with the Fifth Circuit Court of Appeals and challenged the law. The Court agreed with NADA and the Texas Automobile Association to stop CARS from happening. One of the biggest issues with this legal battle concerns if the FTC has the jurisdiction to impose this. Both dealership groups called the rule "an abuse of discretion" which they used in court to stop the rule from being implemented. The FTC agrees, saying the rule "does not impose substantial costs, if any" for non-shady dealerships. They guarantee a more even playing field for consumers and dealerships by eliminating hidden costs and junk fees. If the courts decide to rule for the FTC, the FTC thinks the CARS rule will be delayed by a few months. This means CARS could be enacted before 2025. Even with the FTC fighting and possibly winning this, dealerships have pressured Congress to make laws removing the FTC from regulating car sales. If a dealership breaks the rules, they would have a violation of $50,120. View full article -
The Federal Trade Commission (FTC) created a rule last year to help consumers against unfair practices and fees. Known as the Combating Auto Retail Scams (CARS), this was supposed to take effect on July 30th, 2024. Now, lobbyists were able to get this paused indefinitely. This new development of CARS was fought by the National Automotive Dealers Association (NADA) and the Texas Automobile Dealers Association. They filed a petition with the Fifth Circuit Court of Appeals and challenged the law. The Court agreed with NADA and the Texas Automobile Association to stop CARS from happening. One of the biggest issues with this legal battle concerns if the FTC has the jurisdiction to impose this. Both dealership groups called the rule "an abuse of discretion" which they used in court to stop the rule from being implemented. The FTC agrees, saying the rule "does not impose substantial costs, if any" for non-shady dealerships. They guarantee a more even playing field for consumers and dealerships by eliminating hidden costs and junk fees. If the courts decide to rule for the FTC, the FTC thinks the CARS rule will be delayed by a few months. This means CARS could be enacted before 2025. Even with the FTC fighting and possibly winning this, dealerships have pressured Congress to make laws removing the FTC from regulating car sales. If a dealership breaks the rules, they would have a violation of $50,120. -
As the Diesel Emits: FTC Sues Volkswagen Over 'Clean Diesel' Ads
William Maley posted an article in Volkswagen
Another day, another lawsuit for Volkswagen over the diesel emission scandal. The U.S. Federal Trade Commission filed a lawsuit today in U.S. District Court in San Francisco against Volkswagen of America for false advertising. The suit says Volkswagen claimed in ads their diesel vehicles were clean, when actually they were polluting more thanks to illegal software. "For years Volkswagen's ads touted the company's 'Clean Diesel' cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests," FTC Chairwoman Edith Ramirez said in a statement. The FTC also says in the filing that consumers in the U.S. suffered "billions of dollars in injury" as a result of the illegal software. For many years, Volkswagen promoted their "clean diesel" message through various mediums - print, television, and online ads. The ads were targeted at “environmentally-conscious” consumers. Automotive News says the FTC is seeking a court order to force Volkswagen to compensate U.S. consumers who bought a diesel vehicle and an injunction to prevent the automaker doing this again. Volkswagen spokeswoman Jeannine Ginivan tells Automotive News that the automaker has received the complaint and "continues to cooperate" with all U.S. regulators. Source: Automotive News (Subscription Required), Federal Trade Commission Press Release is on Page 2 FTC Charges Volkswagen Deceived Consumers with its "Clean Diesel" Campaign Seeks Compensation for Those Who Bought or Leased Affected VW and Audi Vehicles over Seven-Year Period March 29, 2016 The Federal Trade Commission has charged that Volkswagen Group of America, Inc. deceived consumers with the advertising campaign it used to promote its supposedly "clean diesel" VWs and Audis, which Volkswagen fitted with illegal emission defeat devices designed to mask high emissions during government tests. The FTC is seeking a court order requiring Volkswagen to compensate American consumers who bought or leased an affected vehicle between late 2008 and late 2015, as well as an injunction to prevent Volkswagen from engaging in this type of conduct again. In a complaint filed in federal court, the FTC alleges that during this seven-year period Volkswagen deceived consumers by selling or leasing more than 550,000 diesel cars based on false claims that the cars were low-emission, environmentally friendly, met emissions standards and would maintain a high resale value. The cars sold for an average price of approximately $28,000. "For years Volkswagen's ads touted the company's 'Clean Diesel' cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests," said FTC Chairwoman Edith Ramirez. "Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen's deceptive and unfair practices." According to the FTC's complaint, Volkswagen promoted its supposedly "clean" cars through a high-profile marketing campaign that included Super Bowl ads, online social media campaigns, and print advertising, often targeting "environmentally-conscious" consumers. For example, Volkswagen promotional materials repeatedly claimed that its "Clean Diesel" vehicles have low emissions, including that they reduce nitrogen oxides (NOx) emissions by 90 percent and have fewer such emissions than gasoline cars. In fact, the FTC's complaint states that they emit up to 4,000 percent more than the legal limit of NOx — a dangerous pollutant that contributes to environmental harms and respiratory ailments. The complaint alleges that Volkswagen also claimed that "Clean Diesel" vehicles met "stringent emission requirements," were "50-state compliant," and would maintain a high resale value. Yet, according to the FTC's complaint, these claims were also false because without the illegally installed software, the "Clean Diesel" vehicles would not have passed federal emissions standards and the hidden defeat devices will significantly reduce the vehicles' resale value. The FTC also charged that Volkswagen provided the means and instrumentalities for others to deceive consumers, and that installing the emissions defeat devices was an unfair practice. The affected vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, and Touareg SUVs, as well as TDI Audi models. The suggested sale prices for the affected vehicles ranged from approximately $22,000 for the least-expensive Volkswagen model with a 2.0-liter engine to approximately $125,000 for the most-expensive Audi model with 3.0-liter engine. The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of California, San Francisco Division. NOTE: The Commission files a 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. The case will be decided by the court. The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources. -
Another day, another lawsuit for Volkswagen over the diesel emission scandal. The U.S. Federal Trade Commission filed a lawsuit today in U.S. District Court in San Francisco against Volkswagen of America for false advertising. The suit says Volkswagen claimed in ads their diesel vehicles were clean, when actually they were polluting more thanks to illegal software. "For years Volkswagen's ads touted the company's 'Clean Diesel' cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests," FTC Chairwoman Edith Ramirez said in a statement. The FTC also says in the filing that consumers in the U.S. suffered "billions of dollars in injury" as a result of the illegal software. For many years, Volkswagen promoted their "clean diesel" message through various mediums - print, television, and online ads. The ads were targeted at “environmentally-conscious” consumers. Automotive News says the FTC is seeking a court order to force Volkswagen to compensate U.S. consumers who bought a diesel vehicle and an injunction to prevent the automaker doing this again. Volkswagen spokeswoman Jeannine Ginivan tells Automotive News that the automaker has received the complaint and "continues to cooperate" with all U.S. regulators. Source: Automotive News (Subscription Required), Federal Trade Commission Press Release is on Page 2 FTC Charges Volkswagen Deceived Consumers with its "Clean Diesel" Campaign Seeks Compensation for Those Who Bought or Leased Affected VW and Audi Vehicles over Seven-Year Period March 29, 2016 The Federal Trade Commission has charged that Volkswagen Group of America, Inc. deceived consumers with the advertising campaign it used to promote its supposedly "clean diesel" VWs and Audis, which Volkswagen fitted with illegal emission defeat devices designed to mask high emissions during government tests. The FTC is seeking a court order requiring Volkswagen to compensate American consumers who bought or leased an affected vehicle between late 2008 and late 2015, as well as an injunction to prevent Volkswagen from engaging in this type of conduct again. In a complaint filed in federal court, the FTC alleges that during this seven-year period Volkswagen deceived consumers by selling or leasing more than 550,000 diesel cars based on false claims that the cars were low-emission, environmentally friendly, met emissions standards and would maintain a high resale value. The cars sold for an average price of approximately $28,000. "For years Volkswagen's ads touted the company's 'Clean Diesel' cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests," said FTC Chairwoman Edith Ramirez. "Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen's deceptive and unfair practices." According to the FTC's complaint, Volkswagen promoted its supposedly "clean" cars through a high-profile marketing campaign that included Super Bowl ads, online social media campaigns, and print advertising, often targeting "environmentally-conscious" consumers. For example, Volkswagen promotional materials repeatedly claimed that its "Clean Diesel" vehicles have low emissions, including that they reduce nitrogen oxides (NOx) emissions by 90 percent and have fewer such emissions than gasoline cars. In fact, the FTC's complaint states that they emit up to 4,000 percent more than the legal limit of NOx — a dangerous pollutant that contributes to environmental harms and respiratory ailments. The complaint alleges that Volkswagen also claimed that "Clean Diesel" vehicles met "stringent emission requirements," were "50-state compliant," and would maintain a high resale value. Yet, according to the FTC's complaint, these claims were also false because without the illegally installed software, the "Clean Diesel" vehicles would not have passed federal emissions standards and the hidden defeat devices will significantly reduce the vehicles' resale value. The FTC also charged that Volkswagen provided the means and instrumentalities for others to deceive consumers, and that installing the emissions defeat devices was an unfair practice. The affected vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, and Touareg SUVs, as well as TDI Audi models. The suggested sale prices for the affected vehicles ranged from approximately $22,000 for the least-expensive Volkswagen model with a 2.0-liter engine to approximately $125,000 for the most-expensive Audi model with 3.0-liter engine. The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of California, San Francisco Division. NOTE: The Commission files a 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. The case will be decided by the court. The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources. View full article
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The current laws and regulations concerning how vehicles are sold are, to put it mildly, a complete mess thanks to states having different versions. Experts can't seem to agree whether the current rules are good or bad. One thing that they can agree on is buying a vehicle is an unpleasant experience due to the current regulations. The Federal Trade Commission held a workshop yesterday as a possible first step to unravel the mess. The big topic that was covered was in the workshop was direct sales with a variety of people on either side of the argument to make their case. For Direct Sales: Tesla Motors is leading the charge for doing direct sales to consumers. Todd Maron, Tesla Motor's lawyer argued the traditional model doesn't work for the company as their electric vehicles compete with gas vehicles and dealers would likely not push electric vehicles since they are dependent on sales of gas vehicles. Maron went on to say Tesla doesn't offer “insurance products and add-ons” or require regular service work. But the key point Maron said Tesla needs a different store design and location. “Our stores are small and in high foot-traffic areas such as shopping malls. When new technology comes out, consumers don’t go to it. You need to bring the technology to consumers,” said Maron. Fiona Scott Morton, a professor at Yale University said the FTC should allow "vertical integration" (another way of saying direct sales from automakers) to improve the buying experience. For the Franchise System: Those standing up for the current system of franchised dealers say intrabrand competition gives consumers a fair price on a vehicle. Automotive analyst Maryann Keller said the direct sales model doesn't offer any savings to consumers. Peter Welch, the president of the National Automobile Dealers Association said dealership laws help American consumers and only a few states have banned direct sales. “Empirical research has demonstrated that intense competition among franchised dealers lowers new-car prices by hundreds of dollars. But the benefits to consumers don’t end there -- they extend to service, warranty work, recalls, and the hundreds of millions of dollars that’s invested in local communities,” Welch went on to say. “Independent dealers add an extra layer of credibility in the auto industry. Imagine how much more difficult the General Motors and Chrysler bankruptcies would have been to resolve had the manufacturers had to bear the high costs of the distribution system, too,” said Paul Norman, a partner at Boardman & Clark law firm. What Happens Next? For the time being, the FTC is taking public comment on direct sales and franchise system till March 4th. After that, we might have an idea of what will happen next. Source: Automotive News (Subscription Required), Autoblog, FTC Comment Form View full article
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The current laws and regulations concerning how vehicles are sold are, to put it mildly, a complete mess thanks to states having different versions. Experts can't seem to agree whether the current rules are good or bad. One thing that they can agree on is buying a vehicle is an unpleasant experience due to the current regulations. The Federal Trade Commission held a workshop yesterday as a possible first step to unravel the mess. The big topic that was covered was in the workshop was direct sales with a variety of people on either side of the argument to make their case. For Direct Sales: Tesla Motors is leading the charge for doing direct sales to consumers. Todd Maron, Tesla Motor's lawyer argued the traditional model doesn't work for the company as their electric vehicles compete with gas vehicles and dealers would likely not push electric vehicles since they are dependent on sales of gas vehicles. Maron went on to say Tesla doesn't offer “insurance products and add-ons” or require regular service work. But the key point Maron said Tesla needs a different store design and location. “Our stores are small and in high foot-traffic areas such as shopping malls. When new technology comes out, consumers don’t go to it. You need to bring the technology to consumers,” said Maron. Fiona Scott Morton, a professor at Yale University said the FTC should allow "vertical integration" (another way of saying direct sales from automakers) to improve the buying experience. For the Franchise System: Those standing up for the current system of franchised dealers say intrabrand competition gives consumers a fair price on a vehicle. Automotive analyst Maryann Keller said the direct sales model doesn't offer any savings to consumers. Peter Welch, the president of the National Automobile Dealers Association said dealership laws help American consumers and only a few states have banned direct sales. “Empirical research has demonstrated that intense competition among franchised dealers lowers new-car prices by hundreds of dollars. But the benefits to consumers don’t end there -- they extend to service, warranty work, recalls, and the hundreds of millions of dollars that’s invested in local communities,” Welch went on to say. “Independent dealers add an extra layer of credibility in the auto industry. Imagine how much more difficult the General Motors and Chrysler bankruptcies would have been to resolve had the manufacturers had to bear the high costs of the distribution system, too,” said Paul Norman, a partner at Boardman & Clark law firm. What Happens Next? For the time being, the FTC is taking public comment on direct sales and franchise system till March 4th. After that, we might have an idea of what will happen next. Source: Automotive News (Subscription Required), Autoblog, FTC Comment Form -
The past couple years have seen Tesla and dealer groups fighting over Tesla's decision to sell vehicles direct to consumers. Certain states have passed laws which exclude Tesla from doing this, while in other states, Tesla has triumphed. Now the Federal Trade Commission’s (FTC) has issued a statement on where they stand. In a post, the FTC says it supports companies that decide to go with the direct-to-consumer sales model as it gives consumers a choice of which method to go with - direct or with a dealer. The FTC also goes onto say that decision lies in hands of the state government, not federal. Now this post comes up as the Michigan senate hears a bill creating an exception in state law to allow manufacturers of "autocycles" - enclosed three-wheelers that are more like cars than motorcycles - to do direct sales in the state. One company that will benefit is Elio Motors who is getting ready to sell their three-wheeled vehicle. "Michigan's consumers would more fully benefit from a complete repeal of the prohibition on direct sales by all automakers," said the commission. Source: The Detroit News, Federal Trade Commission View full article
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FTC States Where It Stands On Direct-To-Consumer Sales
William Maley posted an article in Automotive Industry
The past couple years have seen Tesla and dealer groups fighting over Tesla's decision to sell vehicles direct to consumers. Certain states have passed laws which exclude Tesla from doing this, while in other states, Tesla has triumphed. Now the Federal Trade Commission’s (FTC) has issued a statement on where they stand. In a post, the FTC says it supports companies that decide to go with the direct-to-consumer sales model as it gives consumers a choice of which method to go with - direct or with a dealer. The FTC also goes onto say that decision lies in hands of the state government, not federal. Now this post comes up as the Michigan senate hears a bill creating an exception in state law to allow manufacturers of "autocycles" - enclosed three-wheelers that are more like cars than motorcycles - to do direct sales in the state. One company that will benefit is Elio Motors who is getting ready to sell their three-wheeled vehicle. "Michigan's consumers would more fully benefit from a complete repeal of the prohibition on direct sales by all automakers," said the commission. Source: The Detroit News, Federal Trade Commission -
Three FTC Officials Call For End To The Anti-Tesla Store Laws
William Maley posted an article in Tesla
In a surprising move today, three top officials from the Federal Trade Commission have come out against the laws that ban automakers like Tesla from selling their vehicles directly to consumers. Andrew Gavil, director of the FTC's Office of Policy Planning; Deborah Feinstein, director of the Bureau of Competition; and Martin Gaynor, director of the Bureau of Economics wrote in a blog piece on the FTC site that states the dealer franchise laws are a 'bad idea' since it doesn't allow consumers to shop in new ways. "For decades, local laws in many states have required consumers to purchase their cars solely from local, independent auto dealers," the three said in the post. "Removing these regulatory impediments may be essential to allow consumers access to new ways of shopping that have become available in many other industries." Dealers argue the franchise model works because they compete on price and offer long-term service. However, direct sales offer a threat and could cause other manufacturers to go down the same road. Dealers have turned to lobbyists to sue Tesla in court and urge state representatives to tighten dealer laws. This has only angered the public and legislators from both parties. "How manufacturers choose to supply their products and services to consumers is just as much a function of competition as what they sell--and competition ultimately provides the best protections for consumers and the best chances for new businesses to develop and succeed," the three stated in the piece. "Our point has not been that new methods of sale are necessarily superior to the traditional methods--just that the determination should be made through the competitive process." Now it should be noted that the posting is of the authors and not the FTC. Source: Reuters, FTC William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
In a surprising move today, three top officials from the Federal Trade Commission have come out against the laws that ban automakers like Tesla from selling their vehicles directly to consumers. Andrew Gavil, director of the FTC's Office of Policy Planning; Deborah Feinstein, director of the Bureau of Competition; and Martin Gaynor, director of the Bureau of Economics wrote in a blog piece on the FTC site that states the dealer franchise laws are a 'bad idea' since it doesn't allow consumers to shop in new ways. "For decades, local laws in many states have required consumers to purchase their cars solely from local, independent auto dealers," the three said in the post. "Removing these regulatory impediments may be essential to allow consumers access to new ways of shopping that have become available in many other industries." Dealers argue the franchise model works because they compete on price and offer long-term service. However, direct sales offer a threat and could cause other manufacturers to go down the same road. Dealers have turned to lobbyists to sue Tesla in court and urge state representatives to tighten dealer laws. This has only angered the public and legislators from both parties. "How manufacturers choose to supply their products and services to consumers is just as much a function of competition as what they sell--and competition ultimately provides the best protections for consumers and the best chances for new businesses to develop and succeed," the three stated in the piece. "Our point has not been that new methods of sale are necessarily superior to the traditional methods--just that the determination should be made through the competitive process." Now it should be noted that the posting is of the authors and not the FTC. Source: Reuters, FTC William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
