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On March 13, the Federal Trade Commission (FTC) sent warning letters to 97 automobile dealership groups, putting them on notice that their pricing practices may violate Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices (UDAP) as well as unfair methods of competition.
While the FTC did not publicly identify the recipients in their press release, which includes a sample of the warning letter, this action makes clear that the Commission views deceptive vehicle pricing as a top enforcement priority.
What the Letters Say
The warning letters inform dealers that the price they advertise should be the actual price consumers will pay, aside from required government charges such as taxes. A warning letter is not a determination that a dealer has violated the law. It is, however, a clear signal from the FTC that it has identified conduct it believes is likely unlawful and that failure to correct the issue promptly could lead to serious legal consequences, including a federal enforcement action.
It is important to note that the FTC’s warning letters do not carry the force of law. They represent the Commission’s view of how existing federal law applies to certain pricing practices, but they are not regulations, rules, or binding legal determinations. Rather, they signal the direction the FTC intends to take in future enforcement efforts.
Consistent with FTC’s Stated Enforcement Priorities
The letters are consistent with the enforcement priorities FTC Chairman Andrew Ferguson outlined in his September 2025 remarks at the National Automobile Dealers Association (NADA) Washington Conference. During that speech, Chairman Ferguson emphasized that the FTC would not hesitate to protect consumers from dishonest and unfair treatment in the auto industry. And while consumer complaints about the auto industry cover a range of practices, he emphasized that one of the FTC’s enforcement priorities is ensuring that advertised pricing is transparent and honest. The FTC frequently receives complaints from consumers who see one price advertised online, only to be presented with a different price when they arrive at the dealership.
Conflict of Laws
Adding to the complexity, state laws governing vehicle advertising and pricing vary significantly. Some states have specific statutes addressing dealer advertising practices that may differ from or even conflict with the FTC’s stated expectations. Dealers operating in multiple states may find themselves navigating a patchwork of federal and state requirements, making it essential to evaluate compliance on a state-by-state basis.
What Dealers Can Do Now
Dealers can take this opportunity to carefully review their advertising and pricing practices. That review should include an assessment of online and in-store pricing to confirm that advertised prices reflect the actual price consumers will pay, exclusive only of required government charges. Dealers should also consider conducting a broader compliance audit to identify and address any other areas of potential concern. Dealers who received a letter should consult with an attorney familiar with federal, state, and local laws governing vehicle advertising and sales to determine appropriate corrective measures and to develop a compliance program tailored to their specific dealership operations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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