CHARLOTTE, NC (WBTV) -
A Louisiana company that misled North Carolina consumers
with its advertisements for used car sales events has been permanently banned
from automobile advertising and marketing in North Carolina, Attorney General
Roy Cooper said Tuesday.
"Using false promises and bogus prizes to lure customers is
no way to do business," Cooper said. "Consumers deserve straight-forward
information when they're preparing to make such a big purchase."
Under a consent judgment signed by Wake County Superior
Court Donald W. Stephens, Level 10 Marketing and its owner David M. Bottner are
permanently banned from engaging in any advertising or promotional business
with new or used automobile dealerships in North Carolina. If they fail
to live up to the judgment, they will have to pay a penalty of $40,000.
North Carolina joined Arizona, Iowa, Kentucky, Maryland,
Oregon and Pennsylvania in bringing the case.
As alleged in Cooper's complaint, Level 10 Marketing sold
advertising and sales packages to North Carolina auto dealers designed to
increase sales of the dealers' used vehicle inventories.
The
advertisements falsely claimed that the sales events involved vehicles brought
in from elsewhere by using terms such as "lender's inventory sale" or
"repossessed vehicle event" and used other misleading terms to create a false
sense of urgency, such as "emergency disposal," and "liquidation."
Company advertisements also
claimed that used vehicles would be sold at "90 percent off original price,"
which was actually a comparison with the Manufacturer's Retail Price (MSRP) of
the vehicle when new, according to the complaint, and falsely claimed that
"some vehicles will be available for $1 down, $114 per month." These ads
routinely misrepresented the cost of the vehicles and the ability of consumers
to obtain financing.
"If you're shopping for a new
car, look at car ads carefully," Cooper said. "Knowing the rules for auto
ads can help you avoid being taken for a ride."
When looking at car ads, Cooper's Consumer Protection
Division recommends that consumers:
- Read the fine print and disclosures. Look
for details about how many people received the offer, how many and what
vehicles the offer applies to, and whether the advertised price includes all
charges the buyer must pay.
- Visit the dealership or check online pricing
guides to verify whether the advertised discounts are accurate and a good
value.
- Beware of trade-in guarantees. Be
skeptical if a dealer claims to pay a set amount for your trade-in regardless
of the age or condition of the vehicle. Dealers typically assess
trade-ins based on overall condition, model, and age.
- Know the rules about rebates. The terms
"rebate" or "cash rebate" can only be used by the dealer when a payment is made
by the dealer or manufacturer to a purchaser after the sale, and the
advertising must make clear who is making the payment. If you prefer that
the rebate be applied toward the purchase price, the dealer should have you fill
out a form stating your preference. You should be able to negotiate the
best price for the vehicle and then receive the rebate, or apply the full value
of the rebate to the purchase price.
- Under state law, simulated checks or checks used
for advertising purposes only are illegal.
- Don't be fooled by prizes and
contests. In advertisements, dealers must clearly and prominently
disclose: (1) the actual retail value of each item or prize; (2) the
actual number of each item or prize to be awarded; and (3) the odds of
receiving each item or prize.
- The word "free" may be used only when the advertiser is offering an unconditional gift that does not require you to purchase another product or service.
Consumers can call 1-877-5-NO-SCAM to check out a dealership
or file a complaint, or get
tips on automobiles or file a
complaint online at www.ncdoj.gov.
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