AUTOMOTIVE ADVERTISING REMINDER
PLEASE READ

DIRECT MAIL AND MAILING LISTS

As previously announced, there has been increased scrutiny by state and federal regulatory agencies of direct mail advertising, which is usually done by an outside marketing company.  Remember, the dealership is responsible for the marketing pieces that are sent out by the independent marketing company.  In other words, there is no defense to an advertising violation based on what a marketing company has done on your behalf.

Aside from the advertising rules and the fact that a direct mail piece is an advertisement, there is another issue that must be addressed.  Where does the distribution/mailing list come from when the direct mail piece is sent?  A familiar scenario is when a dealership titles a vehicle in the dealership’s name and two weeks down the road the dealership receives a direct mail piece from their competitor.  The direct mail piece may be for anything from service to terminating their lease early. 

The question that must be answered is where did the marketing company derive the mailing list? If the information came from the Ohio Bureau of Motor Vehicles (OBMV) or the marketing company will not tell you where the information cam from, there may be a problem.  The Ohio revised code specifically states that information obtained from the OBMV may not be used for solicitation purposes unless an individual provides an express written consent to the registrar to release their information. 

The marketing company and the dealership could come under scrutiny from the Ohio Attorney General for utilizing the OBMV information when sending direct mail advertisements.

EMPLOYEE PRICING

Advertising to manufacturer employees is permissible, however there are certain disclosures that are necessary.  For example, the fact that the price or payment is only available to the manufacturer employee must be disclosed in a clear and conspicuous manner in close proximity to the offer.  Further, abbreviations alone such as “A-Plan”, “GMS”, and “DCX” cannot be used unless you explain what those terms mean. 

If you are offering an A-Plan price, you must also state who qualifies for it.  For example, A-Plan prices are available to current Ford employees. The disclosures must be clear and conspicuous and in the close proximity to the offer.

ILLUSORY OFFERS

An illusory offer is a marketing presentation where a statement is made that is deceptive and/or does not exist.  For example,  “we’ll beat any dealers price or we’ll give you the car.”  This is an extreme example, however the problem lies in the additional terms or the disclosure.  Many of these offers state that the consumer must provide a signed buyers order from a competing dealership. 

The offer is illusory because the consumer has purchased a car (signed buyers order) and the offering dealership has a chance to beat it.  If the offering dealership beats the price, the consumer cannot cancel the original contract.   

This type of marketing would fall under the general deceptive provision of the automotive advertising rules which states, “it shall be a deceptive and unfair practice for a dealer… to… use any statement, layout, or illustration in any advertisement or sales presentation which would create in the mind of a reasonable consumer a false impression as to any material aspect of said advertised or offered vehicle…” As a reminder, the Ohio Consumer Sales Practices Act allows for recovery of treble damages and attorney fees.

LIMITED NUMBER OF VEHICLES AT AN ADVERTISED PRICE

A dealer is required to have on hand enough advertised vehicles at a particular price to meet reasonably anticipated demand.  On the other hand, if the advertised vehicle is limited in availability, you must “clearly and conspicuously” include a statement such as:

                                   Only one at this price.

                                                or

                             2 cars at this price, 7 others in stock.

Therefore, utilization of a stock number to indicate limited availability is viewed as a deceptive advertising practice and should not be used as such.   

If you have any comments about the program please feel free to
contact Gary S. Adams or Lou Vitantonio at (440) 746-1500 or by email at gadams@gcada.org or lvitt@gcada.org. This notification and its contents should not be construed as legal advice.