Golden State Today

California Attorney General Rob Bonta led a coalition of 19 attorneys general in filing an amicus brief in support of the Federal Trade Commission's (FTC) new auto sales rule, known as the CARS Rule. The rule aims to address unfair and deceptive practices in the auto sales industry. Filed in the Fifth Circuit Court of Appeals, the brief argues that existing laws have been insufficient to eliminate widespread dealer misconduct.

Attorney General Bonta emphasized the importance of vehicles for many consumers, stating, "That car or truck can be a lifeline that takes them to school, a job, or back home to their families." He added that deceptive practices by car dealers harm low-income consumers and stressed the need for additional regulatory tools.

The CARS Rule targets several deceptive tactics commonly used by car dealers. It prohibits bait-and-switch tactics where dealerships lure customers with false promises only to reveal hidden costs later. The rule also restricts deceptive practices related to vehicle add-ons, ensuring transparency about additional charges.

The National Automobile Dealers Association has challenged the rule, arguing that current laws are sufficient. However, the coalition's brief refutes this claim, asserting that persistent misconduct necessitates stronger regulations.

States have long been involved in protecting consumers from unfair practices in auto sales through investigations and settlements. Attorney General Bonta cited a 2022 settlement with Paul Blanco’s Good Car Company as an example of ongoing issues within the industry. The company was found liable for false advertising and other unlawful business practices.

Consumer complaints about deceptive practices when purchasing cars are common. Reports to agencies like the Better Business Bureau highlight ongoing issues despite existing regulations.

The coalition argues that the CARS Rule is tailored to address noncompliance observed by state attorneys general and provides necessary enhancements to current regulations. By prohibiting misrepresentations and requiring better disclosure and record-keeping, the rule aims to curb deceptive practices effectively.

Joining Attorney General Bonta were attorneys general from Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon Pennsylvania Rhode Island Washington and District of Columbia

In addition to supporting consumer protections through litigation and regulation enforcement efforts include addressing vehicle theft concerns with manufacturers Kia America Hyundai Motor Company pushing for legislative measures such as Assembly Bill 2311 which regulates guaranteed asset protection waivers often sold along with auto loans

A copy of the amicus brief is available online.

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