Crackdown On Consumer Fees Continues At Federal Agencies – Consumer Law

Crackdown On Consumer Fees Continues At Federal Agencies – Consumer Law

July 4, 2022 Off By administrator


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A new Federal Trade Commission (FTC) Notice of Proposed Rulemaking (NPRM)
concerning advertising, add-on products and new disclosures in the
motor vehicle marketplace could have a major impact on industry
participants. Using similar negative rhetoric as a recently
proposed Consumer Financial Protection Bureau Request for Information, the FTC proposes
“Banning Junk Fee Tactics Plaguing Car Buyers.”

The NPRM, specifically, would

  1. prohibit motor vehicle dealers from making certain
    misrepresentations in the course of selling, leasing or arranging
    financing for motor vehicles;

  2. require accurate pricing disclosures in dealers’
    advertising and sales discussions;

  3. require dealers to obtain consumers’ express, informed
    consent for charges;

  4. prohibit the sale of any add-on product or service that confers
    no benefit to the consumer; and

  5. require dealers to keep records of advertisements and customer
    transactions.

Who May Be Impacted by This NPRM?

Motor vehicle dealers offering add-on products and engaging in
advertising campaigns will be directly impacted. The NPRM would
apply to motor vehicle dealers predominantly engaged in the sale
and servicing of motor vehicles, the leasing and servicing of motor
vehicles, or both, as defined in Section 1029 of the Dodd-Frank
Act. Those offering add-on products and engaging in advertising
campaigns should review closely for a direct impact.

State-chartered credit unions and other covered lenders
providing indirect financing, providers, sellers and underwriters
of motor vehicle protection products and other market participants
who could be considered to have engaged in a deceptive or…

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