Recap of Regulatory Actions and Consumer Protection Efforts

The Federal Trade Commission (FTC) recently submitted its annual report to the Consumer Financial Protection Bureau (CFPB), detailing its 2023 activities related to the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA). This report provides important updates for auto dealerships regarding rulemaking, fee transparency, and consumer protection.

Rulemaking Relevant to Dealerships

The FTC’s Combatting Auto Retail Scams (CARS) Rule addresses practices such as bait-and-switch tactics and hidden fees, aiming to provide clear protections for consumers, including military members. Although initially set to take effect on July 30, its implementation is currently delayed pending judicial review.

Transparency in Fee Disclosure

The FTC’s proposed rule on “junk fees” emphasizes the importance of transparent pricing in dealerships. This rule seeks to eliminate hidden fees, ensuring consumers are fully aware of all costs associated with their vehicle purchase. The goal is to promote a fair competitive environment, benefiting both consumers and honest dealerships.

Simplifying Service Cancellations

The proposed updates to the Negative Option rule include a “click to cancel” provision, making it easier for consumers to cancel services. This is particularly relevant for dealerships offering subscription-based services or extended warranties, ensuring that cancellation processes are straightforward.

Military Task Force and Educational Efforts

The FTC's Military Task Force, comprising various FTC representatives, focuses on initiatives to assist military consumers. The report also mentions collaboration with the Department of Defense on military lending issues. Additionally, the FTC’s educational efforts on lending, leasing, and fund transfers provide valuable resources for dealerships to ensure compliance and customer protection.

This annual report is a valuable resource for dealerships, offering insights into regulatory changes and enforcement actions that impact their operations.