Description

The Federal Trade Commission has declined to extend the public comment period for its proposed rule that would ban junk fees and bait-and-switch advertising tactics that can plague consumers throughout the car-buying experience. The deadline for members of the public to comment remains September 12, 2022.

In its decisiondeclining to extend the deadline, the Commission notes that it has received requests from stakeholders asking to extend the deadline, as well as from stakeholders asking to keep the deadline as is. The Commission also notes that by the time the public comment period closes, members of the public will have had 80 days to review the proposed rule.

Members of the public can submit comments on the proposed rule at regulations.gov.

The Commission vote to decline the extension of the comment period was 5-0.

About the Proposed Rule

As auto prices surge, the Commission is seeking to eliminate the tricks and traps that make it hard or impossible to comparison shop or leave consumers saddled with thousands of dollars in unwanted junk charges. The proposed rule would protect consumers and honest dealers by making the car-buying process more clear and competitive. It would also allow the Commission to recover money when consumers are misled or charged without their consent.

In the Notice of Proposed Rulemaking, the Commission is seeking comment on proposed measures that would:

  • Ban bait-and-switch claims: The proposal would prohibit dealers from making a number of deceptive advertising claims to lure in prospective car buyers. This deal deception can include the cost of a vehicle or the terms of financing, the cost of any add-on products or services, whether financing terms are for a lease, the availability of any discounts or rebates, the actual availability of the vehicles being advertised, and whether a financing deal has been finalized, among other areas. Once in the door or on the hook, consumers face the fallout of false promises that don't pan out.

  • Ban fraudulent junk fees: The proposal would prohibit dealers from charging consumers junk fees for fraudulent add-on products and services that provide no benefit to the consumer (including nitrogen filled tires that contain no more nitrogen than normal air).

  • Ban surprise junk fees: The proposal would prohibit dealers from charging consumers for an add-on without their clear, written consent and would require dealers to inform consumers about the price of the car without any of optional add-ons.

  • Require full upfront disclosure of costs and conditions: The proposal would require dealers to make key disclosures to consumers, including providing a true offering price for a vehicle that would be full price a consumer would pay, excluding only taxes and government fees. It would also require dealers to make disclosures about optional add-on fees, including their price and the fact that they are not required as a condition of purchasing or leasing the vehicle, along with disclosures to consumers with key information about financing terms.

The notice includes questions for public comment to inform the Commissions decision-making on the proposal. These include questions about provisions in the proposed rule and whether other provisions should or should not be included in the rule, as well as questions related to the costs and benefits to consumers and auto dealers of the proposed rule. In addition, the notice includes a preliminary regulatory analysis estimating that the net economic benefit of the rule would be more than $29 billion over ten years. After the Commission reviews the comments received, it will decide whether to proceed with issuance of a final rule.

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