Did You Know About The FTC Penalty Increase? (Infographic)
The Federal Trade Commission (FTC) Used Car Rule and the Federal Odometer Act (FOA) require companies to disclose certain information to customers in connection with the sale of new and used vehicles.
All companies that offer to sell more than 5 used vehicles in a 12 month period are subject to the Used Car Rule. Note that simply displaying or allowing customers to inspect a vehicle constitutes an offer to sell.
“Used” means that the vehicle has been driven more than is necessary to move it or road test it prior to delivery to the customer. This rule does not apply to cars sold for scrap, large trucks (at least 8,500 pounds, with a curb weight of at least 6,000 pounds, and a frontal area of at least 46 square feet), ATVs, and motorcycles.
In June 2016, the FTC announced it would increase the maximum penalties per violation from $16,000 to $40,000. This increase went into effect on August 1st. To help you stay in compliance and avoid fines, we’ve put together this list of disclosures and best practices.
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This is one of the 21 regs we’ve packaged up into an easy to use handbook and developed a checklist to help you identify who in your dealership is responsible for each of the 21 rules and regulations.
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The information above is an excerpt from a policy provided by one of our partners, Hudson Cook LLP. We work with them and other industry experts to make sure we are providing accurate and current information, and we manage that information in an online Compliance Management System. One of the benefits of using a Compliance Management System is that it houses all the policies and guidelines you need to be aware of for your industry so you don’t have to go hunting down information; it is simply at your fingertips.