Last week, the Federal Trade Commission (FTC) released a statement that Traffic Jam Events, Inc. and its owner, David J. Jeansonne, II, are banned from the automotive industry for violating the FTC Act and the Truth in Lending Act (TILA). For the next 20 years, the marketing company and owner are prohibited from advertising, selling, or leasing automobiles. The FTC order also forbids them from misrepresenting any material facts while marketing any product or service of any kind.

What Happened?

The company sent multiple mailings that misled consumers into thinking that auto sales websites were associated with a government COVID-19 stimulus program, which wasn’t the case. The mailings used the following:

• A statement saying “IMPORTANT COVID-19 STIMULUS DOCUMENTS ENCLOSED”
• Mock-up of a U.S. government seal
• Mock-up of a check labeled, “Stimulus Relief Program”

Another set of mailings informed consumers that they had won a monetary prize, like $2,500 or $5,000, that could collect at an auto dealership. There were several consumer complaints about these mailings and those consumers who went to collect the monetary prize and were offered different door prizes like Bluetooth headphones.

The Commission determined that these mailings violated the TILA requirement for advertising “close-ended credit” like a car loan. The mailings either didn’t include or provided only in small print the required financing terms that consumers need to identify the cost of the advertised loans.

Traffic Jams Events, Inc. received three prior orders from state agencies for misleading advertising and also from the FTC back in 2020.

Interested in the details? Here is the FTC opinion and the order.

How Do Your Ads Stack Up Against Traffic Jam Events?

When was the last time you took an objective look at your advertisements or talked to your ad agency about the language they use in the ads they provide you?

A couple of weeks ago, KPA recently reviewed 10 steps to ensure your advertising complies with FTC regulations. From expirations dates, misleading information, rebate stacking, and more, review it now.

KPA is Here to Help

A 20-year ban from advertising, selling, or leasing vehicles is no small matter.

KPA’s Vera F&I software and Sales F&I compliance services can be your partner to verify advertisements are federal compliant and not creating unwanted liability for your business. In California, KPA offers advertising review services.

KPA’s auto team is here to help. Contact us.