'Recall' Mailer Raises Issues
By Emily Marlow Beck*
I have finally gotten all of our staff trained to bring me any dealer direct mail pieces that show up in their mailboxes. It is absolutely amazing the things they come up with.
The latest ad to hit my desk was supposedly from the " Used Vehicle Recall Notification Center ." The ad announced a "vehicle recall event" that, upon further examination, was nothing more than a sales event by a Maryland dealer.
Maybe this Maryland dealer hasn't heard about the Georgia dealer trying to fend off the Georgia Attorney General's $50 million suit alleging that the dealer sent out fake vehicle "recall" notices. I haven't seen the mail piece used by the Georgia dealer, so I don't know how closely it resembles the one used by the Maryland dealer, but I can think of 50 million reasons not to use the word "recall" in a direct mail piece.
The Maryland mailer made me raise my eyebrows for a couple of other reasons. Large text in the upper right-hand corner screamed, "Pre-owned vehicles for as much as 70% off original MSRP." Apart from what the cars' original MSRPs have to do with anything, many states expressly prohibit references to MSRP discounts in ads.
Another part of the mailer stated, "Good Credit? Bad Credit? No Problem. We Can Get You Financed Regardless of Your Situation." Statements like these aren't generally a problem, as long as they are completely truthful. This dealer better be prepared to finance every slug that comes onto the lot, or risk an AG's or plaintiff's claim that the ad is unfair and deceptive.
The same thing goes for the ad's statement that "You are pre-approved to receive as much as $5,000 off any pre-owned vehicle or new Hyundai or Mazda in stock." Unless the dealer will be able to prove, if challenged, that customers actually received that sort of discount from the prices at which the dealer customarily sold the cars identified in the ad, the dealer will risk the same sort of "unfair and deceptive" claim.
Are these real worries, or just problems that a pointy-headed lawyer would worry about? I think that they are real, and since I'm writing this on Halloween, maybe even scary real. AGs around the country have made dealer advertisements one of their consumer protection priorities.
Here's a quick dealer checklist for mailers:
• DON'T rely on the mail house or ad agency for legal review. It's your ad, and you will be held accountable for its content.
• DO read the ad and make certain that every statement is not only true, but also not misleading.
• DO stay familiar with the ad requirements imposed by your state's general advertising laws and regulations, as well as special requirements imposed by your state motor vehicle administration, consumer protection agency or other agencies.
• DO stay familiar with the advertising restrictions imposed by the Truth in Lending Act, the Consumer Leasing Act, and Federal Reserve Board Regulations Z and M.
• DO have your dealership's lawyer review the ad.
• DO get the ad company's or mail house's assurances, in writing, that the ad it mails will be the exact ad you and your lawyer reviewed.
• DO keep a file for each mailer, containing the ad, the lawyer's OK, and the agreement with the ad company.
• DO figure out a way to keep up with federal and state legal developments that will affect ad compliance. What was legal last year may not work this year.
If you take these precautions, chances are you'll never have to defend your mailers, and, if you do find yourself called upon to defend them, you will be in much better shape to do so. Don't forget, the AG, and all of his or her staff members, have mailboxes, too.
* Emily Marlow Beck is a lawyer in the Maryland office of Hudson Cook, LLP . Prior to starting her legal career, she spent years working in a family-owned dealership. Emily can be reached at 410.865.5438 or by e-mail at ebeck@hudco.com .
For more information about Thomas Hudson and Spot Delivery® go to www.spotdelivery.com
or contact: tbhudson@hudco.com
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