Court Enters $360,000 Consent Judgment Against Auto Dealership And Advertising Company
For Immediate Release
U.S. Attorney's Office, Northern District of Iowa
In a stipulated judgment entered by the district court, the Billion Auto Group, which has facilities in Sioux City, Iowa City, and Clive, and an advertising company, Nichols Media, have agreed to a $360,000 judgment to resolve claims that they violated a Federal Trade Commission consent order prohibiting deceptive advertising when marketing the cost of buying or leasing a car.
“If auto dealers make advertising claims in headlines, they can’t take them away in fine print,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “These actions show there is a financial cost for violating FTC orders.”
“Our office is committed to working with the FTC and the Consumer Protection Branch of the Department of Justice to ensure a fair marketplace for Iowa consumers,” said Kevin W. Techau, United States Attorney for the Northern District of Iowa. “The action taken in this case is an important step to protect Iowans and sends an important message to the marketplace.”
The FTC authorized the Department of Justice to file a complaint against the chain of 20 Billion Auto automobile dealerships in Iowa, Montana, and South Dakota, and an advertising company, Nichols Media, Inc., for violating a 2012 FTC consent order. That order prohibits Billion Auto, and any companies in active participation with it, from misrepresenting material costs and terms of vehicle finance and lease offers. The order also requires specific disclosures, mandated by the Truth in Lending Act and the Consumer Leasing Act.
According to the complaint, Billion’s advertisements violated the 2012 FTC consent order by frequently focusing on only a few attractive terms while hiding others in fine print, through distracting visuals, or with rapid-fire audio delivery. For example, some dealership ads promoted low monthly payments or attractive annual percentage rates and finance periods, while concealing other material items, such as the low payments being for leases, not sales; major limits on who could qualify for discounts; and significant added costs.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 5:14-cv-4118.
Updated February 19, 2015