FTC Declines to Extend Comment Period on Proposed Auto Rule

On August 23, 2022, the FTC issued a press release that it will not 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.

On June 23,  2022, the FTC published the proposed rule that seeks 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. According to the Commission, the proposed rule would protect consumers and honest dealers by making the car-buying process more clear and competitive. The proposed measures include:

  • Ban bait-and-switch claims. The proposal would prohibit dealers from making a number of deceptive advertising claims to lure in prospective car buyers.

  • 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.

  • 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 the optional add-ons.

  • Require full upfront disclosure of costs and conditions. The proposal would require dealers to make key disclosures to consumers, including the true “offering price”, optional add-on fees (and the fact that they are not required), and financing terms.

Read the FTC’s press release here.

The proposed rule can be found here.

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