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Late last month, Alaska Attorney General Stephen Cox announced that the Alaska Department of Law entered into a settlement with Lithia Motors, resolving allegations that five of its dealerships in Alaska misled consumers about the prices of their cars. As part of the settlement, Lithia Motors agreed to pay $300,000 in civil penalties and costs and to pay restitution to consumers who were overcharged.
Alaska law requires that, when advertising a price, car dealers must include all dealer charges in the advertised price, except for fees actually paid to the government for licensing, registration, or title transfers. Here, the Alaska AG alleged that Lithia Motors charged consumers for document fees that were not included in its advertised prices.
The Alaska AG also alleged that Lithia Motors advertised some cars at their MSRP when the dealers' prices were actually higher. As part of the settlement, Lithia Motors agreed that in any online advertising that promotes an MSRP, rather than the actual price, the company will ensure that it clearly and conspicuously discloses that it is only advertising the manufacturer's suggested retail price and not the asking price. The company agreed that, at a minimum, it would include the term "MSRP" adjacent to the dollar figure and include a conspicuous disclaimer that says, "MSRP is the Manufacturer's Suggested Retail Price. An advertisement and/or listing with MSRP displayed does not necessarily mean that vehicle is being offered for sale by this dealership at MSRP."
In announcing the settlement, AG Cox said, ""There is no excuse for a dealership in Alaska to charge its customers dealer fees that aren't included in its advertised prices. Not only is this explicitly illegal under Alaska law, but it is also fundamentally deceptive to advertise one price online and then charge a higher one at the dealership. That said, Lithia deserves credit: when our Consumer Protection Unit brought their concerns to their attention, Lithia took ownership of its mistakes, assisted in disclosing the extent of the problem, and worked cooperatively with our Consumer Protection Unit to establish a fair resolution."
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