Factory Prices/Factory Authorized Sale Use of words which falsely represent or imply the ownership, operation, or control of a factory, such as “factory showroom,” “factory direct to you,” “factory program headquarters,” and similar terms are unfair and deceptive. Use of the term “factory authorized” and similar terms is deceptive, unless the advertising dealer can substantiate that it has received a unique authorization from the manufacturer and such authorization is in addition to their normal authority to act as a franchisee of the manufacturer. Receiving a special allocation or consignment of vehicles does not, in and of itself, constitute a “factory authorized sale.” Businesses may not advertise, by use of terms such as “direct factory outlet,” “factory sale,” or words of similar import, that a special relationship exists between a manufacturer and a particular dealer, when, in fact, no special relationship exists. It is a deceptive practice to represent that retailers are selling goods at “factory prices,” or words of similar import, to consumers, when they are, in fact, selling at prices in excess of the amount paid by those purchasing directly from the manufacturer. Liquidation/Emergency Sales “Liquidation” implies that a dealer is selling all of a particular year/make/model of a vehicle and that this specific type will no longer be sold at that particular dealership or that the dealer is selling all of the inventory and ceasing to operate the business. It is a deceptive practice to use the terms “liquidation,” “Selling Out,” or other similar terms to refer to a sale of vehicles after which the advertiser will continue to operate the business or will continue to sell the year/make/model of vehicles included in the advertised liquidation. Words such as “Inventory Liquidation,” “Emergency, Forced to Sell,” “Prices Slashed,” “Inventory Liquidation,” or similar terms should not be used, unless the price has been permanently reduced by a significant amount from the actual price and will not be increased at a later date. The word “liquidation” used in conjunction with terms such as “bankruptcy” or “court-ordered” will be considered deceptive if such sale is not ordered by a court or a result of a bankruptcy sale. Going Out of Business Sales It is unlawful to conduct a “going-out-of-business sale,” or other form of distress sale, for more than 90 days.15 After the ninety-day time limit, it shall be an unfair and deceptive practice to continue to do business in any manner contrary to any representations which were made regarding the nature of the going-out-of-business sale. Auctions It is an unfair and deceptive practice to state in any advertisement that a dealership is conducting or will conduct an auction of vehicles for sale to the consuming public, unless the name and Georgia license number of the auctioneer is listed in the advertisement and an auction of vehicles actually occurs.16 Use of the Word “Free” The word “free” should not be used in connection with the purchase or lease of a vehicle or related product or service whose price is arrived at through bargaining. The same representation is also improper where there may be a regular price, but where other material factors such as quantity, quality, or size are arrived at through bargaining. Whenever a consumer is required to purchase or lease any goods or services in order to receive a second offered item, and it is represented in an advertisement that the second item is “free,” then the consumer cannot be charged for that item. When the purchaser is told that an item is “free” to him if another article is purchased, the word “free” indicates that he is paying nothing for that article and no more than the regular price for the other. Thus, a purchaser has a right to believe that the merchant will not directly and immediately recover, in whole or in part, the cost of the free merchandise or service by marking up the price of the article which must be purchased, by the substitution of inferior merchandise or service, or otherwise.17 Use of the words “gifts,” “given at no charge,” “bonus,” “complimentary,” or other similar terms which tend to convey the impression that an item is free are also subject to the above guidelines and relevant FTC Rules. In a promotion dealing with the provision of any product that requires a subscription or an additional requirement or commitment to purchase monthly service, such as a cellular telephone, with the 15 GA. CODE ANN. § 10-1-393(b)(24) (2007). 16 See, GA. CODE ANN. § 43-6-9 (2007). 17 Guide Concerning Use of the Word ‘Free’ and Similar Representations, 16 C.F.R. § 251 (2007). WWW.GADA.COM | 91
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