Lithia Motors, Inc.; Analysis of Proposed Consent Order To Aid Public Comment |
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Topics: Lithia Motors
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Donald S. Clark
Federal Trade Commission
3 February 2016
[Federal Register Volume 81, Number 22 (Wednesday, February 3, 2016)]
[Notices]
[Pages 5754-5756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01944]
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FEDERAL TRADE COMMISSION
[File No. 152-3102]
Lithia Motors, Inc.; Analysis of Proposed Consent Order To Aid
Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis to Aid Public Comment describes both
the allegations in the draft complaint and the terms of the consent
order--embodied in the consent agreement--that would settle these
allegations.
DATES: Comments must be received on or before February 29, 2016.
ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/lithiamotorsconsent online or on paper,
by following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Lithia Motors, Inc.--
Consent Agreement; File No. 152-3102'' on your comment and file your
comment online at https://ftcpublic.commentworks.com/ftc/lithiamotorsconsent by following the instructions on the Web-based
form. If you prefer to file your comment on paper, write ``Lithia
Motors, Inc.--Consent Agreement; File No. 152-3102'' on your comment
and on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Evan Zullow (202) 326-2914 or Courtney
Estep (202) 326-2788, Bureau of Consumer Protection, 600 Pennsylvania
Avenue NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for January 28, 2016), on the World Wide Web
at: http://www.ftc.gov/os/actions.shtm.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before February 29,
2016. Write ``Lithia Motors, Inc.--Consent Agreement; File No. 152-
3102'' on your comment. Your comment--including your name and your
state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the public Commission Web
site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of
discretion, the Commission tries to remove individuals' home contact
information from comments before placing them on the Commission Web
site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does
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not include any sensitive personal information, like anyone's Social
Security number, date of birth, driver's license number or other state
identification number or foreign country equivalent, passport number,
financial account number, or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/lithiamotorsconsent by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you file your comment on paper, write ``Lithia Motors, Inc.--
Consent Agreement; File No. 152-3102'' on your comment and on the
envelope, and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024. If possible, submit your paper comment to the
Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before February 29, 2016. You can find more
information, including routine uses permitted by the Privacy Act, in
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``FTC'' or ``Commission'') has
accepted, subject to final approval, an agreement containing a consent
order from Lithia Motors, Inc. The proposed consent order has been
placed on the public record for thirty (30) days for receipt of
comments by interested persons. Comments received during this period
will become part of the public record. After thirty (30) days, the FTC
will again review the agreement and the comments received, and will
decide whether it should withdraw from the agreement and take
appropriate action or make final the agreement's proposed order.
The respondent is a car dealership that sells used motor vehicles.
According to the FTC complaint, respondent has represented that the
used motor vehicles it sells have been subject to rigorous inspection,
including for safety issues, but has failed to disclose that the used
motor vehicles it sells are subject to open recalls for safety issues.
For instance, the respondent has posted advertisements on its Web
site that make the following representations about vehicles that carry
a dealer-backed ``60 Day/3000 Mile'' warranty: ``160-Point Quality
Inspection--Lithia 60 Day/3,000 Mile vehicles are put through an
exhaustive 160-checkpoint Quality Assurance Inspection. We want the
vehicles to look, feel and smell as new as possible. We inspect
everything from the tires and the brakes to the suspension, drive
train, engine components and even the undercarriage. Only vehicles that
pass all 160 checkpoints (as appropriate to vehicle content) can
receive our 60 Day/3,000 miles Limited Warranty. See dealer for
details.''
Even though it makes such claims, the respondent has allegedly
advertised on its Web sites numerous Lithia 60-Day/3,000 Mile used
vehicles that were subject to open recalls for safety issues. In
numerous instances, when the respondent allegedly advertised Lithia 60-
Day/3,000 Mile used vehicles that are subject to open recalls for
safety issues, it provided no accompanying clear and conspicuous
disclosure of this fact. The proposed complaint alleges that this
failure to disclose constitutes a deceptive act or practice under
Section 5 of the FTC Act.
The proposed order is designed to prevent the respondent from
engaging in similar deceptive practices in the future. Part I prohibits
the respondent from representing that used motor vehicles it offers for
sale are safe, have been repaired for safety issues, or have been
subject to an inspection for issues related to safety unless the used
motor vehicles are not subject to any open recalls for safety issues or
the respondent discloses, clearly and conspicuously, in close proximity
to such representation, any material qualifying information related to
open recalls for safety issues. Part II is a provision that orders the
respondent to notify every consumer who purchased from it a 60-Day/
3,000 Mile used motor vehicle between July 1, 2013 and the date of
entry of the Order that some of the used vehicles it sold during this
time had been recalled for safety issues which weren't repaired as of
the date they were sold, how to determine whether a vehicle is subject
to an unrepaired recall, and information on how to get a vehicle fixed
if it is subject to an open recall.
Parts III through VII of the proposed order are reporting and
compliance provisions. Part III requires the respondent to maintain for
five years, and produce to the Commission upon demand, any relevant ads
and associated documentary material. Part IV is an order distribution
provision that requires the respondent to provide the Order to current
and future principals, officers, directors, and managers, and to all
current employees, agents, and representatives having responsibilities
with respect to the subject matter of the Order. Part V requires the
respondent to notify the Commission of corporate changes that may
affect compliance obligations. Part VI requires the respondent to
submit a compliance report to the Commission 60 days after entry of the
order, and also additional compliance reports within 10 business days
of a written request by the Commission. Part VII ``sunsets'' the order
after twenty years, with certain exceptions.
The purpose of this analysis is to aid public comment on the
proposed order.
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It is not intended to constitute an official interpretation of the
complaint or proposed order, or to modify in any way the proposed
order's terms.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-01944 Filed 2-2-16; 8:45 am]
BILLING CODE 6750-01-P