Houston Independent Automobile Dealers Association July Issue: Social Media | Page 14

The CARLAWYER ©
By Thomas B. Hudson and Nicole Frush Munro
Here’s our monthly article on legal developments in the auto sales, finance and lease world. Last month’s
report was skimpy, but this month’s is skimpier yet. The Consumer Financial Protection Bureau seems to
have dug a foxhole and pulled the sod in on top of itself. That doesn’t mean that the CFPB is inactive,
though. Instead of pressing with new rules and high-profile enforcement actions, the Bureau seems to be
focusing hard on supervisory activities. That makes sense, since supervision isn’t in the public eye and is
a lot less likely to draw fire from Congressional Republicans and other CFPB critics. In any event, this
month’s article features our “Case of the Month,” activity from the CFPB, the Federal Trade Commission
and two state attorneys general.
Why do we include items from other states? We want to show you legal developments and trends. Also,
another state’s laws might be a lot like your state’s laws. If attorneys general or plaintiffs’ lawyers are
pursuing particular types of claims in other states, those claims might soon appear in your state.
Note that this column does not offer legal advice. Always check with your lawyer to learn how what we
report might apply to you, or if you have questions.
This Month’s CARLAWYER© Compliance Tip
For federal and state regulators, dealership ads are the lowest-hanging fruit. A photocopy of a
newspaper ad or a screen shot of a website is all the proof needed to show many violations. Once a
dealership’s obviously noncomplying ad is challenged, the only question remaining is the number of
zeroes needed to complete the check the dealership writes to pay the assessed penalty.
Where do your ads come from? Do you buy ad programs from a vendor, or do you craft the ads
yourself? If you use a vendor, what written assurances about compliance do you demand before you
sign the vendor’s contract? If you are doing the ads yourself, how much do you know about the federal
and state laws that regulate your ad content? If you’re just duplicating ads from another dealership that
you picked up at your last 20-group meeting, you probably need to be in another business.
Federal Developments
VW Clean Diesel Claims. On May 17, the FTC announced that a federal district court judge in San
Francisco signed a settlement negotiated by the FTC and private plaintiffs providing for consumer redress
and starting the formal claims process for owners of Volkswagen, Audi, and Porsche 3.0 liter TDI diesel
cars. The settlement deals with Volkswagen’s allegedly misleading “clean diesel” claims. The FTC will
monitor VW’s compliance with the settlement’s provisions, which include special protections for those in
the armed forces and rural consumers who may be far from the nearest dealer. Under the 2.0 liter and
3.0 liter settlements, Volkswagen will offer consumers over $11 billion in compensation. The FTC
announced in February that consumers who bought 3.0 liter vehicles will receive up to $1.2 billion in
compensation in addition to the more than $10 billion redress fund already created for 2.0 liter
consumers. In all, consumers who bought affected “clean diesel” vehicles will receive up to $11.5 billion,
and the court may hold Volkswagen in contempt if it makes deceptive environmental claims in the future.
Hold On to Your Wallet! The FTC held a conference in Washington, D.C, on May 24 that examined the
state of identity theft now and how it may evolve in the future. The “Planning for the Future” event brought
together industry representatives, consumer advocates, government officials, and others.