Car dealers face heightened regulatory scrutiny as the FTC has declared advertising vehicles that are unavailable for purchase to be illegal, prompting industry experts to recommend swift removal of sold vehicle listings within 24 hours.
Automotive News reports that the FTC has intensified its oversight of automotive dealership advertising practices, specifically targeting the promotion of vehicles that are no longer in stock or do not exist. This enforcement action carries significant financial consequences, with violations potentially exposing dealerships to fines exceeding $50,000 per offense plus customer restitution, according to attorney Patricia Covington who spoke with Automotive News.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, sent letters to 97 dealership groups earlier this month, alerting them to suspected violations of six advertising practices the agency considers illegal. While five of these practices involve pricing discrepancies — such as advertising vehicles below actual out-the-door prices, omitting mandatory dealership fees, making prices contingent on specific down payments, requiring dealer financing, or advertising rebates not universally available — the sixth practice directly addresses inventory accuracy.
Mufarrige identified “advertising unavailable or nonexistent vehicles” as a violation, creating immediate compliance challenges for dealers who must balance marketing efficiency with inventory turnover. Adam Crowell, chief legal and strategy officer at compliance firm KPA, emphasized the importance of timely action in an interview, stating, “Not taking down the listings in a timely fashion certainly could be an issue.”
Brad Miller, co-CEO and chief legal officer of compliance firm ComplyAuto, addressed dealership concerns during a webinar, recommending that dealers establish formal processes for advertisement removal. He advised participants to “make it pretty fast. … I would think within 24 hours you can generally get these off your website.” The FTC declined to specify exact timeframes for compliance, citing a desire not to provide legal advice.
Chris Cleveland, ComplyAuto’s co-CEO, suggested protective measures including online disclaimers that describe removal procedures within a specified timeframe. In a follow-up email, he proposed timestamped inventory updates with affirmative availability statements confirming each listed vehicle is either physically present or properly status-tagged as in transit with specific arrival dates. “The timestamp makes the data auditable,” Cleveland wrote. “The affirmative availability statement confirms every listed vehicle is either on the lot or properly status-tagged, which satisfies the bona fide offer requirement.”
Cleveland also warned against vague disclaimers suggesting vehicles “may not be available,” calling such language a “red flag” to regulators. “You’re basically admitting … you’re advertising cars that aren’t available for sale,” he explained during the webinar.
Larger dealership groups have increasingly adopted automated inventory management systems. The Rick Case Automotive Group, a 12-dealership operation based in Sunrise, Florida, ranks 25th among U.S. dealership groups with 28,458 new vehicles sold in 2024. CEO Rita Case confirmed on March 26 that her organization employs both automated software integration and manual monitoring to maintain advertising accuracy.
State-level enforcement has also emerged, with Swickard Auto Group agreeing to pay $800,000 in penalties plus a $200,000 suspended penalty to settle allegations by the Alaska Department of Law regarding unfair or deceptive practices. The department announced the settlement on March 24, alleging Swickard advertised unavailable models and refused to sell vehicles at advertised prices.
Alaska Attorney General Stephen Cox stated, “Car dealers don’t get to advertise one price and charge another — or advertise cars that aren’t really there. That’s a bait-and-switch, and it’s unlawful.”
Read more at Automotive News here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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