For eight Massachusetts auto dealers this was not a happy New Year. On January second, the Attorney General fined eight dealers for misleading consumers about the prices of vehicles in their print advertisements. The dealers were required to pay civil penalties in the amount of $290,000 and agree to refrain from engaging in false or misleading price advertising in the future.

In an Assurance of Discontinuance filed with the Suffolk County Superior Court, the Attorney General alleged the dealers had:

1. Used asterisk pricing to represent the price of a motor vehicle.

2. Displayed prices artificially lowered to reflect cash or trade value.

3. Misrepresented rebates reflected in displayed vehicle prices.

Asterisk pricing is defined as advertising a prominently displayed, artificially low price for a vehicle where the material terms and conditions that must be met to receive the advertised price, are listed in small print separate from the prominent price and include a cash or trade reduction. The Attorney General contends that the above advertising practices misled consumers concerning the actual prices of motor vehicles.

Keep in mind that the press releases related to this are from the Attorney Generals office. It is not unusual for the dealers to have another side of the story, but then choose to settle Attorney General claims in order to avoid the cost of further litigation.

Without admitting liability, the dealers agreed to cease the foregoing activities and pay a civil penalty ranging from $20,000 to $75,000 per dealer. The dealers specifically agreed to stop displaying prices for vehicles where the prices are reduced by applying cash or trade-in values, if the cash or trade-in values are not displayed in a form of equal prominence to the prominently displayed price. The dealers agreed not to display the MSRP of a vehicle reduced by applying a rebate or other discount, unless the dealers provided the criteria necessary to receive a non-universal rebate or clearly and conspicuously described a universal rebate or discount. The dealers further agreed to display any material term modifications of an advertised price clearly and conspicuously and to refrain from generally misrepresenting the price of any vehicle or advertising price where the dealer knows, or should know, that the advertisement could mislead a reasonable consumer.

Massachusetts is one of many states where Attorneys General are concentrating on practices that appear unfair or deceptive to consumers. In the January issue of the Maryland Bar Journal, Marylands Attorney General calls his office the biggest and best law firm in the state. He champions consumer protection as the bread and butter of the Attorney Generals office and states that they plan to actively pursue consumer complaints to right wrongs and to protect the public. In an election year where consumer protection is at the forefront and credit providers are on the chopping block, car dealers are a big target for up and coming elected officials. You should beware your of local Attorney General (aka aspiring governor), but be aware of your advertising practices first.

Nicole Munro is a partner in the Maryland office of Hudson Cook, LLP. Ms. Munro represents motor vehicle dealers, sales finance companies, and lenders engaged in motor vehicle finance transactions. For copies of the Assurance of Discontinuance or the Massachusetts Attorney Generals press release, please contact Ms. Munro. She can be reached at 410-865-5430 or by e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .