Information and Alerts

Government Action

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.

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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
COMMISSIONERS: Edith Ramirez, Chairwoman
Julie Brill
Maureen K. Ohlhausen
Joshua D. Wright
In the Matter of
BILL ROBERTSON & SONS, INC.
a California corporation d/b/a
HONDA OF HOLLYWOOD
DOCKET NO. ____________
COMPLAINT
The Federal Trade Commission, having reason to believe that Bill Robertson & Sons,
Inc. d/b/a Honda of Hollywood, a corporation ("respondent"), has violated provisions of the
Federal Trade Commission Act ("FTC Act"), the Consumer Leasing Act ("CLA"), and its
implementing Regulation M, and it appearing to the Commission that this proceeding is in the
public interest, alleges:
1. Respondent is a California corporation with its principal office or place of business at
6525 Santa Monica Boulevard, Los Angeles, California 90038. Respondent offers
automobiles for sale or lease to consumers.
2. The acts or practices of respondent alleged in this complaint have been in or affecting
commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
3. Since at least March 2013, respondent has disseminated or caused to be disseminated
advertisements to the public promoting the purchase, finance, and leasing of automobiles.
4. Respondent has disseminated or caused to be disseminated advertisements promoting
consumer leases for automobiles, as the terms "advertisement" and "consumer lease" are
defined in Section 213.2 of Regulation M, 12 C.F.R. §213.2, as amended.
5. Respondent has placed numerous such advertisements promoting consumer leases for
automobiles in the Los Angeles Times newspaper. A copy of one such full-page
advertisement that ran in the Los Angeles Times is attached as Exhibit A. The
advertisement contains the statements and depictions described in this paragraph;
respondent's advertisements in other editions of the Los Angeles Times contain
substantially similar statements and depictions.
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a. Respondent's advertisements prominently state: "0 FIRST PAYMENT," "0
DOWN," "0 SECURITY DEPOSIT," "0 DUE AT SIGNING," and "0.9% APR
Long Term Finance Available On Approved Credit on select models." For
example, the following statement is prominently featured at the top of the
advertisement attached as Exhibit A:
b. Beneath this representation, photographs of several different vehicles appear, with
each stating a monthly lease payment amount immediately below the photograph.
For example, the advertisement in Exhibit A features a 2013 Honda Accord Sedan
LX, with a monthly lease payment of $199, as follows:
c. The following statement appears in small print below the representation of the
monthly lease payment amount:
Lease for $199/month + tax for 36 months on approved above average credit. $2,399 due at
lease signing. Includes down payments with no security deposit. Excludes taxes, titles and
dealer fees. 12K miles/year. 15¢ per mile in excess.
d. Small print below each featured vehicle states that consumers must pay a
substantial amount at lease signing for that vehicle. For example, the amounts
due at lease signing for the four vehicles featured in Exhibit A range from $1,995
to $2,499. Thus, consumers must pay substantially more than the "0 DUE AT
SIGNING" that is prominently stated at the top of the advertisement.
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FEDERAL TRADE COMMISSION ACT VIOLATIONS
Count I
Misrepresentation of Amount Due at Lease Inception
6. Through the means described in Paragraph 5, respondent has represented, expressly or by
implication, that consumers can pay $0 at lease inception to lease the advertised vehicles
for the advertised monthly payment amounts.
7. In truth and in fact, consumers cannot pay $0 at lease inception to lease the advertised
vehicles for the advertised monthly payment amounts. Consumers must also pay at least
$1,995 at lease signing. Therefore, the representation set forth in Paragraph 6 was, and
is, false or misleading.
8. Respondent's practices constitute deceptive acts or practices in or affecting commerce in
violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
VIOLATION OF THE CONSUMER LEASING ACT AND REGULATION M
9. Under Section 184 of the CLA and Section 213.7 of Regulation M, advertisements
promoting consumer leases are required to make certain disclosures ("additional terms")
if they state any of several terms, such as the amount of any payment ("CLA triggering
terms"). 15 U.S.C. § 1667c; 12 C.F.R. § 213.7.
10. Respondent's advertisements promoting consumer leases, including but not necessarily
limited to those described in Paragraph 5, are subject to the requirements of the CLA and
Regulation M.
Count II
Failure to Disclose or to Disclose Clearly and Conspicuously Required Lease Information
11. Respondent's advertisements promoting consumer leases, including but not necessarily
limited to those described in Paragraph 5, have included CLA triggering terms, but have
failed to disclose or to disclose clearly and conspicuously additional terms required by
the CLA and Regulation M, including one or more of the following:
a. That the transaction advertised is a lease.
b. The total amount due prior to or at consummation or by delivery, if delivery
occurs after consummation.
c. Whether or not a security deposit is required.
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d. The number, amount, and timing of scheduled payments.
e. With respect to a lease in which the liability of the consumer at the end of the
lease term is based on the anticipated residual value of the property, that an extra
charge may be imposed at the end of the lease term.
12. Therefore, the practices set forth in Paragraph 11 of this Complaint have violated Section
184 of the CLA, 15 U.S.C. § 1667c, and Section 213.7 of Regulation M, 12 C.F.R. §
213.7.
THEREFORE, the Federal Trade Commission, this _______ day of _______, 2014, has
issued this complaint against respondent.
By the Commission.
Donald S. Clark
Secretary