Billion Auto Group, ad agency, agree to pay $360,000 fine for deceptive advertising

An advertising company and a large car dealership, with a showroom in Iowa City, agreed to a $360,000 judgment to resolve claims that violated a Federal Trade Commission order prohibiting deceptive advertising when marketing costs of buying or leasing a car.

The Billion Auto Group, which has locations in Iowa City, Sioux City, and Clive, and Nichols Media, Inc., the advertising agency, agreed to the stipulated judgment entered by U.S. District Court Tuesday.

The FTC authorized the U.S. Department of Justice to file a complaint against the chain of 20 Billion Auto car dealerships in Iowa, Montana, and South Dakota, and Nichols Media for violating a 2012 commission consent order. The order prohibits Billion Auto and any companies in active participation with it from misrepresenting material costs and terms of vehicle finance and lease offers. The order also requires specific disclosures, mandated by the Truth in Lending Act and the Consumer Leasing Act.

'Our office is committed to working with the FTC and the Consumer Protection Branch of the Department of Justice to ensure a fair marketplace for Iowa consumers,” U.S. Attorney Kevin Techau said Tuesday. 'The action taken in this case is an important step to protect Iowans and sends an important message to the marketplace.”

Jessica Rich, director of the commission's Bureau of Consumer Protection said if car dealers make 'advertising claims in headlines, they can't take them away in fine print.”

'These actions show there is a financial cost for violating FTC orders.”

According to the complaint, Billion's ads violated the 2012 order by frequently focusing on only a few attractive terms while hiding others in fine print, through distracting visuals, or with rapid-fire audio delivery.

As an example, some dealership ads promoted low monthly payments or attractive annual percentage rates and finance periods, while concealing other items, such as the low payments are only for leases, not sales; major limits on who could qualify for discounts; and significant added costs.