WASHINGTON, D.C. — Two Ohio dealers have agreed to settle Federal Trade Commission (FTC) charges that they deceived consumers with advertisements that touted low monthly car lease payments but failed to disclose key terms of the offers.

The FTC’s administrative complaint alleged that Progressive Chevrolet and Progressive Motors Inc. of Masillon, Ohio, failed to properly disclose terms such as the total amount due at signing, whether a security deposit was required, and credit score requirements. According to the regulator, “typical consumers could not qualify for the advertised terms.

The dealers were charged with violating the FTC Act and the Consumer Leasing Act’s Regulation M. Progressive Chevrolet Company also does business as Progressive Auto Group and Progressive Motors Inc.

The proposed settlement order, which will remain in effect for 20 years, prohibits the dealers from advertising misleading lease or finance terms. It also requires them to clearly and conspicuously disclose all qualifications or restrictions on a consumer’s ability to obtain the advertised terms.

“If the ad states that consumers must meet a certain credit score in order to qualify for the offer and a majority of consumers are not likely to meet the stated credit score, the ad must clearly and conspicuously disclose that fact,” the FTC stated in its release.

The dealers are also barred from advertising a payment amount, or that any or no initial payment is required without clearly disclosing that the transaction is a lease; the total amount due at consummation or delivery; the number of payments and their amounts and timing; whether or not a security deposit is required; and that there may be an extra charge at the end of the lease where the consumer’s liability is based on the difference between the vehicle’s residual value and its value at the end of the lease.

The commission’s vote to issue an administrative complaint and accept the proposed consent agreement was 4-0. The agreement will be subject to public comment for 30 days after it is published in the Federal Register. After that, the commission will decide whether to issue the order on a final basis.

 

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