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FTC, Partners Conduct First Compliance Sweep under Newly Amended Used Car Rule

Agency: Federal Trade Commission Date: 12 July 2018

The Federal Trade Commission, working jointly with 12 partner agencies in seven states, conducted the first compliance sweep of car dealerships since the amended Used Car Rule took effect earlier this year. Under the amended Rule, dealers must display a revised window sticker called a “Buyers Guide,” which contains warranty and other important information for consumers, on each used car they offer for sale.

The compliance sweep was conducted between April and June 2018, in 20 cities nationwide. The inspectors found Buyers Guides on 70 percent of the more than 2,300 vehicles inspected, with almost half of those displaying the revised Buyers Guide. Of the 94 dealerships inspected, 33 had the revised Buyers Guide on more than half of their vehicles, and 14 had revised Buyers Guides on all of their used cars.

Following the sweep, the FTC sent letters to each dealership detailing the results of the inspections and providing material to help them come into full compliance with the amended Rule. Over the coming weeks, dealerships that were not displaying the revised Buyers Guide can expect follow-up inspections to ensure they have brought themselves into compliance with the amended Rule. Under the FTC Act, dealers who fail to comply face penalties of up to $41,484 per violation. State and local law enforcement agencies also enforce the recently amended Rule.

The Revised Buyers Guide

On November 18, 2016, the FTC amended the Used Car Rule. Under the amended Rule, as of January 28, 2018, dealers are required to display a revised Buyers Guide on all used vehicles they offer for sale. The revised Buyers Guide:

• Changes the description of an “As Is” sale;
• Places boxes on the face of the Buyers Guide that dealers can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available;
• Provides a box that dealers can check to indicate that an unexpired manufacturer’s warranty applies;
• Adds air bags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles;
• Adds a statement that directs consumers to obtain a vehicle history report and to check for open recalls;
• Adds a statement, in Spanish, to the English-language Buyers Guide, advising Spanish-speaking consumers to ask for the Buyers Guide in Spanish if the dealer is conducting the sale in Spanish; and
• Provides a Spanish translation of the statement that dealers may use to obtain a consumer’s acknowledgement of receipt of the Buyers Guide.

Dealership Locations and FTC Partners

Through this sweep, the FTC and its partners inspected dealerships in: 1) Burbank, North Hollywood, Richmond, San Bruno, San Jose, San Pablo, and Van Nuys, California; 2) Jacksonville, Florida; 3) Chicago, Illinois; 4) New York, New York (Queens); 5) Brooklyn Heights, Cleveland, East Cleveland, and Cleveland Heights, Ohio; 6) Arlington, Dallas, and Grand Prairie, Texas; and 7) Lakewood, Puyallup, and Tacoma, Washington.

The FTC would like to thank the following partners for their assistance in the current compliance sweep: 1) the California Department of Motor Vehicles Inspection Division; 2) the Contra Costa County Office of the District Attorney; 3) the Los Angeles County District Attorney’s Office; 4) The Santa Clara County Office of the District Attorney; 5) the San Mateo County Office of the District Attorney; 6) the Florida Bureau of Dealer Services; 7) the Cuyahoga, Ohio, County Department of Consumer Affairs; 8) the Ohio Bureau of Motor Vehicles; 9) the City of Chicago Department of Business Affairs and Consumer Protection; 10) the New York City Department of Consumer Affairs; 11) the Texas Department of Motor Vehicles; and 12) the Washington State Office of the Attorney General.

Additional Resources

The FTC has additional information about the Used Car Rule on its website, including:

• Dealer’s Guide to the Used Car Rule; and
• Answering Dealers’ Questions about the Revised Used Car Rule

More information on the Buyers Guides can be found here:

• Buyers Guides: Guidance;
• Buyers Guides: Fillable Forms; and
• Buyers Guides: Format Notes.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

CONTACT FOR CONSUMERS:
Consumer Response Center
877-382-4357

CONTACT FOR NEWS MEDIA:
Mitchell J. Katz
Office of Public Affairs
202-326-2161

STAFF CONTACT:
John C. Hallerud
Midwest Region
312-960-5615