Pub. 19 2020-2021 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E 4 | 2 0 2 0 20 new jersey auto retailer Advertising in the Age of COVID: 10 Things You Need to Know BY MICHAEL P. MCMAHAN, ESQ., AND CHRISTOPHER T. KOENIG, ESQ. It’s a pandemic, and your old sales methods may not be working. You’ve got to get people in the door, so you run all sorts of advertisements. It’s a crazy year, so anything goes, right? Wrong. State and federal regulators are watching closer than ever to ensure consumers are not hurt by businesses looking to make a quick buck. As dealers have been required to focus on COVID protocols to safely operate their businesses over the past year, it’s important not to forget about adherence to other regulatory compliance requirements. Advertising in the COVID era is more critical than ever to attract customers, so it’s a good time to refresh your familiarity with certain legal requirements and perform an audit of your advertising program. The following focuses on the important provisions of the New Jersey Motor Vehi- cle Advertising Practices Act ( “MVPA” ) and Federal Trade Commission ( “FTC” ) rules and regulations. 1. Don’t pretend to be COVID relief. This one would seem obvious, and yet it still needs to be said. The Florida Attor- ney General and the FTC recently took action against an ad agency for creating a mailer for a used car dealer de- signed to look like a COVID-19 stimulus check. The out- side of the envelope stated in bold text, “IMPORTANT COVID-19 ECONOMIC STIMULUS DOCUMENT ENCLOSED.” Inside was a mock check from the “Stim- ulus Relief Program.” The state and federal authorities are looking hard at businesses that try to take advantage of consumers during this time. Don’t try a “new angle” or something you think will get a lot of attention. 2. Don’t oversell your COVID compliance. In the COVID-19 era, the bottom line is the same as it is for any other ad- vertising. When making statements, feel free to tout your efforts but don’t deceive and mislead consumers. For exam- ple, we recently found an ad where a dealership implied a special affiliation by stating that it was taking direct orders from the CDC to keep customers healthy. Making a com- ment like that only invites scrutiny. The better approach would have been to state We are following state and federal guid- ance to maintain a clean and safe environment, or, Our dealership is committed to your health and safety. It’s doubtful that either of these would be objectionable to state and federal regu- latory authorities — as long as the dealership is actually practicing what it is preaching. 3. Digital advertising is advertising. The MVPA is simply stated but casts a broad net. That net covers any advertise- ment that is “uttered, issued, printed, disseminated, pub- lished, circulated or distributed” within or outside the State relating to the sale or lease of vehicles at in-state locations. Radio and television broadcasts, newspapers, signs, and the catchall “other publication” and “electronic medium” are specifically mentioned. In the digital age in which we live, it’s safe to assume that the MVPA covers many advertising tools available online. This includes email blasts, specials posted through social media, Google and Facebook ads, and even individual texts from employees and salespersons mentioning pricing and special deals to their longtime clients. ( See N.J.A.C. 13:45A-26A.2 ). 4. Sell the goods you advertise. The MVPA takes dealerships to task for bait and switch advertising — offering a deal that seems too good to be true on paper, but that deal is nowhere to be found when the customer comes calling. The state presumes “bait and switch” advertising has occurred if any of the following occur: ( i ) the dealership refuses to show, display, sell or lease an advertised vehicle, unless it can be shown the advertised vehicle was actually sold; ( ii ) a deposit is accepted for the advertised vehicle, but the customer is unknowingly switched to a higher-priced unit; ( iii ) the deal- ership delivers an unwanted, higher-priced unit instead of the advertised vehicle and the customer is stuck paying the difference. ( See N.J.A.C. 13:45A-26A.4 ). 5. Ads must meet unusual requirements. You may have come to expect that an ad must disclose the specifics of any vehicle offered for sale and the terms of any leasing deals, etc. But did you know that you must disclose whether a used car once was a taxi or a company car? ( You must disclose non-personal use of used vehicles) . Did you know that some ads