Federal Action Against Deceptive Pricing

The Federal Trade Commission (FTC) has issued a warning to 97 auto dealer groups across the United States regarding deceptive pricing practices and unexpected fees. This action comes after numerous consumer complaints about misleading advertisements and hidden costs.

Consumer Complaints Spur Investigation

In 2024, Utah’s Division of Consumer Protection began receiving a high volume of complaints related to “bait-and-switch” pricing, unavailable vehicles, and unexpected add-on charges. These complaints included issues like prep fees, fabric protection, VIN etching, and mandatory market adjustments.

FTC Identifies Illegal Practices

The FTC outlined six specific scenarios it deems illegal in a recent letter to dealer groups. These include:

  • Advertising prices that exclude required fees
  • Advertising prices contingent on rebates or discounts not available to all buyers
  • Omitting required down payments from advertised prices
  • Basing advertised prices on dealer financing
  • Requiring unwanted add-ons
  • Advertising vehicles that are not in stock

FTC Statement on Transparency

Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, stated, “The Trump-Vance FTC is committed to preventing auto dealers from misleading consumers with low advertised prices and then adding on mandatory fees at the end of the purchasing process.” He further emphasized the FTC’s commitment to monitoring dealerships for transparent price competition.

Utah's Consumer Protection Efforts

Katie Hass of Utah’s Division of Consumer Protection explained the state’s goal is to “create a level playing field” in the automotive marketplace. The division sent warning letters to dealers within the state earlier in the year.

Protecting Yourself from Surprise Fees

Consumers are advised to be cautious if the final price of a vehicle differs significantly from the advertised price. It is recommended to take a screenshot of the advertisement and request a complete, out-the-door price from the dealer before signing any paperwork.

If discrepancies arise, consumers can report issues to the Utah Division of Consumer Protection and the Federal Trade Commission.