Greenway Automotive has agreed to settle FTC allegations that the company charged consumers thousands of dollars more than it advertised.

The company has agreed that its advertisements will prominently include the actual price a consumer must pay for a vehicle, excluding charges the government requires purchasers to pay.

The order, filed in the U.S. District Court for the Middle District of Florida also prohibits deceptive prize mailers and specific misrepresentations, including whether taxes, charges, fees, products or services are optional or required, as well as whether any type of or source for financing is required.

“Truthful advertising in the auto industry is vital because purchasing a car is one of the most significant financial decisions consumers make,” Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection said. “Consumers can’t make informed choices when the actual price is hidden.”

According to the complaint filed by the FTC, the agency contended that Greenway allegedly:

• Inflated the amount it charged the majority of consumers by tacking on mandatory fees, packages and penalties that cost consumers thousands of dollars.
• Charged consumers more than $3,350, on average, over the advertised price in more than 92% of sales. “The fees Greenway allegedly imposed on top of the advertised price included so-called administrative fees, dealer fees, delivery fees and processing fees,” the FTC said.” Greenway’s advertised prices at times also allegedly reflected conditional rebates and discounts available only to a subset of consumers.”
• Lured consumers into dealerships using scam mailers that claimed that recipients had won thousands of dollars in cash prizes that could be collected at a company dealership. Those prizes were not real, according to the FTC. The FTC said the company added false promises of price transparency to their websites, while continuing to advertise vehicles for thousands less than their actual prices.

The FTC has been focused on the auto industry.

The commission staff has published Frequently Asked Questions  (FAQs) to warn the automobile industry that it must comply with FTC Act requirements on vehicle pricing.

The guidance emphasizes that the advertised price of a vehicle must be the actual price that a consumer can walk in and pay to purchase the vehicle. Only charges that the government requires the consumer to pay may be excluded, according to the commission.

As part of its efforts to encourage price transparency, the FTC earlier this year sent letters to 97 auto groups nationwide to encourage dealers to review their advertising practices and warning them that the prices they advertise must be the actual price that consumers will be required to pay to purchase a vehicle.

The FTC also warned that it continues to file lawsuits against dealers alleging that they mislead consumers by advertising one price, only to end up charging more for a vehicle.