North Carolina Department of Justice
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AG Cooper wins judgment against problematic auto advertiser

Release date: 1/15/2013

Louisiana firm banned from pitching bogus sales events at NC car dealerships

Raleigh: A Louisiana company that misled North Carolina consumers with its advertisements for used car sales events has been permanently banned from automobile advertising and marketing in North Carolina, Attorney General Roy Cooper said today.
 
“Using false promises and bogus prizes to lure customers is no way to do business,” Cooper said. “Consumers deserve straight-forward information when they’re preparing to make such a big purchase.”
 
Under a consent judgment signed by Wake County Superior Court Donald W. Stephens, Level 10 Marketing and its owner David M. Bottner are permanently banned from engaging in any advertising or promotional business with new or used automobile dealerships in North Carolina. If they fail to live up to the judgment, they will have to pay a penalty of $40,000.
 
North Carolina joined Arizona, Iowa, Kentucky, Maryland, Oregon and Pennsylvania in bringing the case. 
 
As alleged in Cooper’s complaint, Level 10 Marketing sold advertising and sales packages to North Carolina auto dealers designed to increase sales of the dealers’ used vehicle inventories. The advertisements falsely claimed that the sales events involved vehicles brought in from elsewhere by using terms such as “lender’s inventory sale” or “repossessed vehicle event” and used other misleading terms to create a false sense of urgency, such as “emergency disposal,” and “liquidation.”
 
Company advertisements also claimed that used vehicles would be sold at “90 percent off original price,” which was actually a comparison with the Manufacturer’s Retail Price (MSRP) of the vehicle when new, according to the complaint, and falsely claimed that “some vehicles will be available for $1 down, $114 per month.” These ads routinely misrepresented the cost of the vehicles and the ability of consumers to obtain financing.
 
“If you’re shopping for a new car, look at car ads carefully,” Cooper said. “Knowing the rules for auto ads can help you avoid being taken for a ride.”
 
When looking at car ads, Cooper’s Consumer Protection Division recommends that consumers:
 
•Read the fine print and disclosures. Look for details about how many people received the offer, how many and what vehicles the offer applies to, and whether the advertised price includes all charges the buyer must pay. 
• Visit the dealership or check online pricing guides to verify whether the advertised discounts are accurate and a good value.
•Beware of trade-in guarantees.  Be skeptical if a dealer claims to pay a set amount for your trade-in regardless of the age or condition of the vehicle. Dealers typically assess trade-ins based on overall condition, model, and age. 
•Know the rules about rebates. The terms “rebate” or “cash rebate” can only be used by the dealer when a payment is made by the dealer or manufacturer to a purchaser after the sale, and the advertising must make clear who is making the payment. If you prefer that the rebate be applied toward the purchase price, the dealer should have you fill out a form stating your preference. You should be able to negotiate the best price for the vehicle and then receive the rebate, or apply the full value of the rebate to the purchase price.
• Under state law, simulated checks or checks used for advertising purposes only are illegal. 
• Don’t be fooled by prizes and contests.   In advertisements, dealers must clearly and prominently disclose: (1) the actual retail value of each item or prize; (2) the actual number of each item or prize to be awarded; and (3) the odds of receiving each item or prize.
 • The word “free” may be used only when the advertiser is offering an unconditional gift that does not require you to purchase another product or service.
 
Consumers can call 1-877-5-NO-SCAM to check out a dealership or file a complaint, or get tips on automobiles or file a complaint online.

  Contact:  Noelle Talley, (919) 716-6413