The Ohio Attorney General (“OAG”) expressed recently that it would make the enforcement of motor vehicle advertising laws a priority. For many Ohio dealerships, this means increased pressure to comply with a variety of consumer protection statutes, while still controlling advertising spending in a large, competitive market. What steps, then, should Ohio dealerships take to follow Ohio laws while still maintaining a competitive advantage?
Dealerships should first review their own advertising for compliance. Dealers should start by avoiding advertising “red flags” indicating unfair or deceptive practices that violate Ohio law. For example, “mouse print” in a disclaimer or disclosure constitutes a red flag, and dealers should instead use a font that is clear and noticeable. In written advertising, a 10-point font is presumed to be lawful, unless of course the font’s color or style renders it otherwise unnoticeable (e.g., a disclaimer in white print against a white background). As far as the substance of disclaimers, they should not confuse, contradict, materially modify, or unreasonably limit a principal message of an advertisement; disclaimers and footnotes should explain an advertising statement, not contradict it.
Certain key terms and phrases may also constitute red flags. In particular, dealerships should avoid the usage of “liquidate,” “bank foreclosure,” “specially selected,” or “wholesale pricing direct to the public.” A dealership should also avoid falsely claiming or implying it sells vehicles at lower prices because of the dealership’s size, inventory, or sales volume. Such advertising practices, unless true and substantiated, are typically confusing to consumers and, therefore, may violate Ohio advertising laws or trigger an OAG investigation.
Additional red flags relate to advertising used and demonstrator vehicles. For example, it violates Ohio law to reference, either directly or indirectly, a manufacturer’s suggested retail price (“MSRP”) in an advertisement for a previously owned vehicle. Automobile advertisements must also disclose the fact that a vehicle is used through the words “used,” “previously owned,” or “pre-owned.” In addition, Ohio law requires d ealerships to disclose the fact that a vehicle was used as a demonstrator vehicle if it has been driven less than 6,000 miles.
Certain specific types of advertisements may also raise red flags. For example, prize notifications, instant savings scratch-offs, and advertisements or direct-mail solicitations that include fake “checks” may trigger an OAG investigation. Fake checks, in particular, are deceptive because consumers tend to be misled to believe that the check is a form of currency. Prize advertisements may be similarly deceptive unless a dealership discloses all material terms to receiving the prize, among other legal requirements.
In addition to avoiding red flags, Ohio dealerships should consult with legal counsel if they are faced with an OAG investigation, are defending or initiating a civil lawsuit, or would like advertising copies reviewed for compliance. Dealerships should seek an attorney who is experienced in advertising law and is knowledgeable in both state and federal consumer protection statutes. An attorney can assist dealerships in resolving disputes over a competitor’s false or misleading advertising. Legal consultation can also help to defend, and more importantly avoid, costly disputes with consumers and government agencies.