FTC Announces Settlement & $3 Million Civil Penalty Against Dealership

This announcement follows the FTC’s March 13 announcement that it sent 97 warning letters to dealerships alleging illegal advertising practices. Examples of illegal pricing practices mentioned in the warning letters were the subject of this settlement.

In a separate statement announcing the settlement, Chairman Andrew Ferguson and Commissioner Mark Meador emphasized that price transparency is at the core of consumer protection, citing Chairman Ferguson’s remarks at NADA’s Washington Conference in September 2025.

The FTC continues holding dealer leadership—as well as the dealership entities themselves—responsible for alleged unlawful behavior. The FTC and Maryland Attorney General alleged that the dealership group:

• Misrepresented vehicle prices by advertising a low vehicle price and refusing to honor that price because a consumer did not qualify for all the rebates or incentives included in the advertised price;

• Misrepresented vehicle prices by advertising a low vehicle price and later adding previously undisclosed, mandatory fees;

• Misrepresented vehicle prices by advertising a low vehicle price and later stating it only applied to vehicles financed through the dealership;

• Deceptively charged consumers for voluntary protection products and “add-ons,” including products the customer did not agree to; and 

• Falsely claiming that products were required, or “packing” sales contracts with products to achieve an artificially inflated monthly payment. 

The settlement requires the dealership to advertise the total price of a vehicle clearly and conspicuously as the most prominently displayed price in its advertisements. The total price of a vehicle is the maximum total price, including all mandatory fees or charges a consumer must pay for a vehicle, except government charges.

The settlement further states that the dealership can comply with the settlement terms for third-party advertising if the dealership provides the third party the total price as the most prominently displayed item and ensures the third party advertises the vehicle with this prominent price disclosure. Other recent FTC settlements with dealerships have not included language regarding prominent price disclosure and third-party advertising but did require advertising the total price of the vehicle.

The settlement also requires the dealership group to obtain express, informed consent before charging a consumer for any add-on product or service.  

FTC settlements are only between the party and the FTC and are not an admission of guilt. 

NADA will be presenting a second webinar with the FTC where the FTC has committed to answering questions about the warning letters and dealer advertising practices. (The first webinar was on Monday April 6.) Details below.  

NEW NADA-FTC JOINT WEBINAR – FRIDAY, APRIL 17, 3PM ET – REGISTER HERE

NADA has arranged another Advertising Webinar with the FTC that is scheduled for Friday, April 17, at 3 pm ET. Paul Metrey will host Chris Mufarrige, Director, FTC’s Bureau of Consumer Protection, to address questions regarding the FTC Advertising Warning Letters.

This will not be an advocacy session but rather will focus on the FTC’s compliance expectations for dealers, from the standpoint of Mufarrige, who directs all of the FTC’s enforcement efforts under consumer protection laws. The webinar, which will be recorded, is not open to the public or members of the media.

The FTC also plans to develop a set of FAQs to supplement the information provided during the webinar.

Dealers should carefully review the recent enforcement action with an attorney familiar with federal, state, and local laws governing vehicle advertising, sales and financing, as well as their dealership operations personnel to determine appropriate compliance measures.

Go Deeper:

• Dealer Guide to Federal Advertising Requirements

• NADA/NAMAD/AIADA Model Dealership Voluntary Protection Products Policy (Endorsed by the National Urban League and League of United Latin American Citizens

• NADA Webinar (4/6/26): Hear Directly from a Senior FTC Official on Dealer Advertising 
  (login required)