Posted Mar 16, 2012 10:30 am CDT
Five car dealerships in four states have agreed to pull trade-in ads to settle administrative complaints by the Federal Trade Commission.
The FTC had claimed the ads deceived consumers into believing they would no longer have to pay the loan balance on their trade-ins, according to a press release. In a first for the FTC, the agency targeted ad claims such as these:
• “Credit upside down? Need a new car? Go to Billionpayoff.com. We want to pay off your car.”
• “Uncle Frank wants to pay [your trade] off in full, no matter how much you owe.”
In reality, the customers were responsible for paying the difference between the loan balance on the trade-in and its value. The negative equity was rolled into loans on new vehicles, according to a story on the settlements by the National Law Journal.