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Arkansas Dealer to Pay $90,000 Penalty for Not Displaying Buyers Guide

June 11, 2015

JONESBORO, Ark. — An Arkansas auto dealer and its owners have agreed to pay a $90,000 civil penalty to settle Federal Trade Commission charges that they failed to display a “Buyers Guide” on used vehicles offered for sale, as required by the FTC’s Used Car Rule.

In March 2014, the FTC charged Abernathy Motor Company, Wesley Abernathy and David Abernathy with violating the rule, which is designed to ensure that consumers have important purchasing and warranty information when shopping for a used car. The Buyers Guide tells consumers whether the vehicle comes with a warranty and what that warranty covers, among other things.

The rule also provides that the Buyers Guide becomes a part of the sales contract and overrides any contrary provisions in the contract.

In addition to the $90,000 civil penalty, under the proposed final order, Abernathy Motor Company and its owners are prohibited from misrepresenting material facts about used vehicles offered for sale, including mechanical condition, the terms of any warranty offered, and that there is a warranty when a vehicle is sold without one. They are also barred from failing to disclose, before a sale, material terms and conditions, including that a used vehicle is sold without a warranty if none is offered, and the terms of any warranty.

The proposed order also requires the defendants to display prominently a properly completed Buyers Guide on used vehicles, with all of the disclosures required by the Used Car Rule and reflecting the warranty coverage, and to include this statement in sales contracts: “The information you see on the window form for this vehicle is part of this contract. Information on the window form overrides any contrary provisions in the contract of sale.” For sales conducted in Spanish, the dealership must provide the same information in Spanish.

The FTC vote authorizing the staff to file the proposed stipulated order for permanent injunction was 5-0. It was filed in the U.S. District Court for the Eastern District of Arkansas, Jonesboro Division.

 

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