Press Release  AG Healey Applauds FTC on New Proposed Rule to Strengthen Consumer Protections in Car Sales and Calls for Further Action

BOSTON — Massachusetts Attorney General Maura Healey co-led a coalition of 18 attorneys general calling on the Federal Trade Commission to adopt and strengthen guidance on automobile sales. 

The comment letter supports the FTC’s proposed Motor Vehicle Dealers Trade Regulation Rule, which would require greater transparency in the sale, financing, and leasing of motor vehicles by dealers. The proposed rule, published in the Federal Register on July 13, would provide a critical tool to address misrepresentations and prevent consumer harm. 

“Purchasing a vehicle is one of the most significant financial decisions for many families and individuals across Massachusetts,” said AG Healey. “I am proud to join my colleagues in urging the FTC to strengthen this guidance on automobile sales to further protect and help consumers.” 

The FTC’s proposed rule would assist with combatting unfair and deceptive acts in the vehicle marketplace. It aligns with existing guidance from industry trade groups, as well as state laws and regulations. The proposed rule would: 

• Prohibit motor vehicle dealers from making certain misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles. 
• Require accurate pricing disclosures in dealers’ advertising and sales discussions. 
• Require dealers to obtain consumers’ express, informed consent for certain charges. 
• Require transparency about add-on products and their pricing. 
• Prohibit the sale of any add-on product or service that confers no benefit to the consumer. 
• Require dealers to keep records of advertisements and customer transactions. 

In the letter, the attorneys general support the provisions of the proposed rule and offer the following suggestions to further strengthen the rule:  

• Require price disclosures in writing regardless of the form of the inquiry.  
• Require that price disclosures provide complete information on the cost to purchase or finance the sale of a vehicle.  
• Require written disclosures and obtain written consumer consent before the purchase of any optional add-ons.  
• Require auto dealers to retain records on all contracts for the duration of the contract. 
• Set a time limit for dealers to pay off the lien on any traded-in vehicle to protect consumers and ensure a fair marketplace.  
• Regulate the use of starter-interrupt devices to encourage safety and transparency. 

In their letter, the attorneys general also thank the FTC for addressing the lack of a national standard for transparency in motor vehicle sales. The coalition hopes the final rule will increase protections for consumers across the country and ensure a more competitive and equitable marketplace. 

AG Healey’s office has continuously advocated for consumers against deceptive practices within the automobile industry, including dealerships. For years, auto issues have remained a top complaint to the AG’s office. In 2021, AG’s office received more than 3,000 consumer complaints about auto-related matters. Typically, complaints about used car sales were the most frequent, followed by issues with auto repair and auto financing.   

The AG's Office has been an advocate for Massachusetts consumers, through enforcement actions against dealerships that have engaged in unfair and deceptive practices in the sale of vehicles. These actions have secured millions of dollars of restitution and debt relief for consumers through settlements with dealerships like JD Byrider, Auto Number One, Auto Drive One, AutoMax, Inc. and F & R Auto Sales. 

In May 2021, the AG’s Office secured nearly $800,000 in debt relief and refunds to Massachusetts consumers against United Auto Credit Corporation for facilitating the sale of defective and unsafe vehicles by used car dealerships and had reached similar resolutions with Source One Financial and Sensible Auto Lending. The AG’s Office also issued an advisory to consumers and auto dealers last September, specifically reminding auto dealers of their obligation to accurately advertise price, honor advertised prices, and comply with consumer lease contract provisions.  

To read the full letter, click here. 

The letter, led by Illinois, Iowa, Maryland, Massachusetts, and Pennsylvania, is also joined by the attorneys general of California, Colorado, Connecticut, Delaware, District of Columbia, Hawai’i, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, and Washington. 

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