box will not be enough to be the customer’s “express, informed consent” to purchase “add-on products and services.” First, this is an amazing statement to make and denies any rational and reasonable way by which business is conducted. Second, this will require additional documentation or language on all disclosure forms, which contradicts the FTC’s consistent statements that the transaction to buy a motor vehicle is too complicated and confusing, which increases the likelihood of consumer confusion. 5. The new FTC rule also contains language which prohibits misrepresentations about “the cost or terms of purchasing, financing or leasing a vehicle,” or “any cost, limitation, benefit or any other material aspect of an add-on product or service,” and even one broader that states “the availability of any rebates or discounts that are factored into the advertised price but not available to all consumers.” Of course, these are already governed by our West Virginia Consumer Credit and Protection Act and other West Virginia common law governing misrepresentation, actual fraud and constructive fraud. In addition, there exist federal laws that govern advertising. This proposed rule can lead to inconsistent application or interpretation of existing laws and makes it very difficult to determine how to interpret and apply current relevant law. 6. One interesting attempt by the FTC is to govern what we refer to as “conditional delivery.” The new proposed section would prohibit misrepresentation that a dealer would keep cash down payments or trade-in vehicles, charging fees or initiating legal process or any action if a transaction is not finalized or the consumer does not wish to engage in the transaction. This is an overt attempt to control conditional deliveries to customers. I would encourage our West Virginia dealers to take this opportunity to review their conditional delivery or spot delivery forms to make sure that they are very clear on how this legal contractual “condition subsequent” will operate and what remedies may be available to a dealer should a consumer either misuse or damage a motor vehicle while in their possession. 7. The FTC would make it a violation for a dealer to misrepresent “whether or when a motor vehicle will pay off some or all of the financing or lease on a customer’s trade-in vehicle.” This is a blatant misunderstanding of who is in control of this fact. While a dealer will promptly attempt to initiate these actions to obtain its monies and funding, it is up to third parties to determine how quickly the motor vehicle is paid off and when a new title can be given on a purchased motor vehicle. Dealers are at the mercy of Continued from page 10 various lenders and how soon the Department of Motor Vehicles (DMV) can process titles. While our own DMV is making great strides and progress with electronic titling, again, this is placing a burden on the motor vehicle dealer, which is outside their control. 8. Interestingly, the FTC is attempting to promulgate more rules that control prizes and sweepstakes, how motor vehicles can be repossessed and representations about the exporting of vehicles. This seems rather strange as already existing laws govern these scenarios. 9. The FTC is attempting to place new record-keeping rules within this proposed rule even though they have passed the comprehensive new safeguard rule with which we are all striving to comply by the deadline on Dec. 9, 2022. For example, the new record-keeping requirements would require that a motor vehicle dealer maintain, for 24 months, all records “necessary to demonstrate compliance with this proposed rule.” They list things such as all advertisements, sales scripts, training materials and marketing materials, all add-on lists and all documents describing the products and services offered to customers, all purchase and lease orders, all financing documentation and communications, and all written consumer complaints related to sales, financing or leasing, and of course, the add-ons. 10. Perhaps the most blatant part of this proposed rule would strictly govern how dealers actually do business within the F&I office and how presentations of “add-ons” must be made. The dealer must disclose the “offering price” only for a vehicle referenced in advertising or the first response to an inquiry by a customer. This would prevent a dealer from offering various voluntary Interestingly, the FTC is attempting to promulgate more rules that control prizes and sweepstakes, how motor vehicles can be repossessed and representations about the exporting of vehicles. wvcar.com 12 WVADA
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