The Federal Trade Commission announced that it reached a settlement with Greenway Auto Group, resolving allegations that the company advertised prices that were thousands of dollars below the price that it actually charged to consumers and that the company lured consumers to dealerships through fake prize promotions. 

As part of the settlement, Greenway agreed that the “Total Price” that consumers are required to pay will be the most prominently displayed charge in the company's advertising.  The order defines “Total Price” as “the maximum total price, including all mandatory fees or charges a consumer must pay for a motor vehicle, except that charges a Federal, State, or local government agency, unit, or department requires the consumer to pay may me excluded.”  

In this case, the FTC alleged that Greenway's dealers “systematically deceive consumers shopping for motor vehicles by advertising vehicles for thousands of dollars less than the actual price Defendants charge.”  The FTC alleged that the Greenway inflated the advertised prices – once consumers arrive at the dealership – by adding dealer-imposed fees, claiming that advertised prices reflect conditional rebates and discounts only available to a subset of consumers, charging for mandatory add-on packages, inflating government charges, and simply increasing prices without explanation. 

The FTC also alleged that Greenway lured consumers into its dealership by falsely representing that consumers had won prizes which must be collected at the dealer. The FTC said that when consumers arrive at the dealers, however, “they discover the prizes shown on the mailer are not real, and instead just another ploy to get them in the door so that Defendants can sell them cars.”  

This enforcement action should come as no surprise to auto dealers.  In March, the FTC sent warning letters to ninety-seven auto dealership groups warning them about their pricing practices.  In September, the FTC issued guidance on price transparency for auto dealers, warning them that “the advertised price of a vehicle must be the actual price that any consumer can walk in and pay to purchase the vehicle, excluding only charges that the government requires the consumer to pay.”