G&A Marketing provided ads for dealers' "sales events" that falsely implied that vehicles were from rental car company bankruptcies, or used other false premises.
DES MOINES. Attorney General Tom Miller said today that an Ohio company must change its tactics when it provides ads and promotions to dealers in Iowa and other states for used-car "sales events."
"We alleged that G&A Marketing created 'false-premise' ads," Miller said, "such as falsely representing that vehicles were from sources such as rental car company bankruptcies, bank repossessions, or fleet liquidations.
"The problem is that such ads mislead customers into thinking vehicles must be sold quickly and at bargain prices, when that is not the case," Miller said. "Consumers are misled, and sometimes they end up paying prices that are even higher than normal."
Gunning & Associates Marketing, Inc., of Milford, Ohio, entered a formal assurance of compliance with Iowa and nine other states that it will not make or imply false claims about the sources of vehicles or make other false claims. The company also will pay a total of $300,000 to the states.
Gunning & Associates Marketing, Inc., does business under various names, including G&A Marketing, Fleet Liquidators of America, and National Fleet Liquidators. It enters into agreements with dealerships around the country to provide promotional materials, advertising, training, and staff assistance for used-car sales promotions, and dealerships typically pay the company an up-front advertising fee and a percentage for every vehicle sold during a "sales event."
Background and details:
States who are party to the settlement with G&A Marketing are Iowa, Oregon, Washington, California, Delaware, Florida, Maine, Tennessee, Vermont, and North Dakota. The District Attorney of Tulare County, California, also is party to the agreement. Negotiations were led by the Iowa AG's Consumer Protection Division and its counterparts in Oregon and Washington.
Gunning & Associates, Inc., does not admit any violations in the "Assurance of Voluntary Compliance" it entered with the states.
The states asserted that vehicles sold in G&A-promoted "sales events" came from the dealers' usual inventories, even though the vehicles might be touted as from government fleets, rental car bankruptcies, bank repossessions, and the like.
One ad created by G&A Marketing and used in Iowa for a "sales event" began with a large headline reading "Major Rental Car Company Has Gone Bankrupt." Another full-page ad for the same event led with these banner headlines: "RENTAL CAR COMPANIES DESPERATE; MOVE QUICKLY TO LIQUIDATE INVENTORY" and "MAJOR RENTAL CAR COMPANY HAS GONE BANKRUPT." Indeed, a major rental car company filed for Chapter 11 reorganization bankruptcy in the 1990s - but the vehicles touted in the sale had nothing to with that.
"We alleged that such representations are designed to give the false impression that the sales offer rock-bottom prices," Miller said. "Dealers are always free to advertise used cars for sale, but the claims they make must be truthful and not deceptive. The ads involved in this settlement didn't make the grade."
The states said that "sales events" often included G&A personnel being involved in vehicle sales, and they noted that Gunning sales staff used very aggressive sales tactics designed to maximize profit, not to offer lower-than-usual prices to consumers.
Under the settlement agreement with Gunning & Associates, Inc., the company:
- Must not make false claims in advertised promotions.
- Must not make or imply false claims about the sources of vehicles offered for sale, such as falsely claiming the vehicles are from vehicle fleets, auto auctions, or bank repossessions, or that a sale is being sponsored or conducted by a bank, lending institution, fleet, repossession or liquidation company, or that Gunning or its clients are in the liquidation business.
- Must comply with federal credit reporting and truth in lending laws in its advertisements.
- Must disclose the monthly payment amount based on financing only of the vehicle's purchase price, and not including the cost of optional items.