Regulator Sues Dealerships for Undisclosed, Mandatory Add-Ons and Unavailable Vehicles

August 11, 2023.  The Alaska Attorney General filed a lawsuit against an auto dealership group for unfair and deceptive advertising involving mandatory add-ons that were undisclosed and vehicles that were unavailable.

On August 9, 2023, the Alaska Attorney General announced that it filed suit against an Alaska Auto Group for advertisements that were alleged to be unfair and deceptive.  Following an investigation, the dealership group is alleged to have engaged in:

• Bait-switch-tactics by advertising vehicles with an assigned vehicle identification number (VIN) when it does not possess that vehicles, does not possess any other new vehicles of the same make or model, and does not expect to acquire any new vehicles of the same make or model in the future, resulting in customers purchasing models at price well above the advertised price; and
• Continuously advertising vehicles for sale on its website at or below MSRP, and refusing to sell the vehicles at the advertised prices unless the customer also purchases add-ons (such as extra warranties, ceramic coating, dent and ding protection, and door edge guards and cups) which are not disclosed in the online advertisements.

The lawsuit requests that the court order the defendants to:

• Pay $25,000 for each violation of Alaska’s Unfair Trade Practices and Consumer Protection Act; and
• Issue an injunction to stop the dealers' illegal conduct.

In announcing the lawsuit, Alaska Attorney General Treg Taylor stated, "Buying a car is already a stressful process and an important decision for consumers.  We will not allow car dealerships to engage in illegal advertising and sales practices that make purchasing a car even more difficult for consumers. Nor will we allow unscrupulous dealerships to gain an unfair advantage over their competitors."

"There is a growing trend amongst dealership regulators," says Adam Crowell, President & General Counsel at ComplyNet, "they are consistently focusing their enforcement efforts on pricing transparency and eliminating mandatory fees that were not advertised."

Consumer complaints about advertising is just one way that a dealership can hit a regulator's radar.  ComplyNet works with thousands of dealerships across the company to provide solutions that help prevent regulatory violations, and to resolve consumer complaints before they evolve into investigations.

To learn more about ComplyNet's solutions for managing consumer complaints and compliance in the sales, F&I, and advertising departments, schedule a time to MEET WITH US.