My wife and I venture out for breakfast at least weekly. We were out of town today, so we tried a new place. I ordered a Mexican omelet thinking it would have the usual chorizo and cheese.

The omelet arrived with salsa and a grilled jalapeño on top. Flour tortillas accompanied the dish instead of toast. So far so good.

After I added some hot sauce on top, I dove in. It had ham, not chorizo. It also had bell peppers, mushrooms and onions.

I asked the waitress about the meal. She said that, at this restaurant, a Mexican omelet is a Western omelet with salsa and jalapeño on top.

I looked at the menu again. Sure enough, the description under the Mexican omelet was “Western omelet with salsa and jalapeño.”

Gotta read past the headlines, I guess.

When the Federales Make the Headlines

A headline date stamped March 13 (a Friday no less) screamed “FTC Issues Warning Letters to 97 Dealers.” The industry went into a tizzy. As we know by now, the letters addressed what the Federal Trade Commission identified as violations of Section Five of the FTC Act, which deals with deceptive practices.

Reading past the headline, the six deadly sins listed in the letters are:

•        Advertising a price that does not reflect all required fees

•        Advertising a price that reflects rebates or discounts not available to all consumers

•        Advertising a price that fails to take into account the amount of an additional required down payment

•        Conditioning the advertised price on consumers using dealer financing

•        Requiring consumers to buy additional items not reflected in the advertised price

•        Advertising unavailable or nonexistent vehicles

Like many of you, we tuned in for two National Automobile Dealers Association-sponsored webinars with FTC representatives. We did get some clarity but still have a bevy of questions. The FTC has promised to issue an FAQ.

Here are some of the questions I fielded from dealers on March 13, with answers — none of which are intended as legal advice:

•        Is this a new FTC rule? No, it is an announcement of enforcement.

•        When will enforcement go into effect? Unclear, but dealers are on notice, so assume “now.”

•        Does this just apply to a dealer’s website? No, it applies to all media, including salespeople’s social media pages and verbal offerings.

•        What if state law conflicts with the FTC pronouncement? The FTC says its rules take precedent. Let it know if your dealer runs into issues with state regulators.

•        What about Truth in Lending and Truth in Leasing? The dealer’s advertising must remain compliant with these disclosure requirements.

What’s a Dealer to Do?

If I were an agent, my first words of advice to my dealer clients would be to step back from the ledge. Yes, the FTC’s letters will change the way dealers advertise. But we are all on notice that the FTC insists on a level playing field. Violators can be subject to further FTC investigation. I’ve heard of at least one state dealer association whose dealers have pledged to report violators to the FTC.

Second, the dealer needs to leverage the requirements under its federally mandated compliance management system. These steps are:

•        Conduct a risk assessment. Measure current advertising against the six deadly sins.

•        Develop a policy and update the policy manual. This policy must include rules for salespeople who are using individual social media accounts to generate leads.

•        Provide training for pertinent personnel. Be sure to document the attendee list.

•        Periodically audit advertising. This includes all media.

•        Utilize a third-party auditor. Artificial intelligence-driven software available from my company and others can uncover issues in real time and produce reports on demand. Find a provider you like and put them to work.

As always, write or call with any questions or thoughts.

Continued good luck and good selling.

LEARN MORE: Dealer Ads and the FTC

Gil Van Over, a recent inductee to the Bobit Business Media F&I Hall of Fame, is executive director of Automotive Compliance Education (ACE), founder and president of gvo3 & Associates, and author of “Automotive Compliance in a Digital World.”