Last month, Alaska Attorney General Stephen J. Cox announced that his office entered into a settlement with a group of Swickard car dealerships, resolving false advertising allegations against the dealers. As part of the settlement, the dealers agree to pay a civil penalty of $800,000.
The Alaska AG alleged that the dealers engaged in bait and switch advertising by promoting vehicles that were not actually available for purchase in order to draw customers to its lots. The AG also alleged that the dealers refused to honor advertised prices, requiring customers to purchase expensive dealer add-ons.
In announcing the settlement, Cox said, “Car dealers don’t get to advertise one price and charge another—or advertise cars that aren’t really there. That’s a bait-and-switch, and it’s unlawful. Alaskans already face higher costs than most—this settlement holds Swickard accountable and reinforces that the price you see should be the price you pay.”
Interestingly, the consent decree includes a provision that says that if the dealers engage “in a reckless violation or persistent violations” of Alaska's consumer protection laws in the future, the court may impose an additional penalty of up to $200,000.
This enforcement action is yet another example of the heightened scrutiny that car dealer advertising is under right now. Earlier this month, the Federal Trade Commission settled a similar action. And, in March, the FTC sent warning letters to nearly 100 car dealers.
Car dealers don’t get to advertise one price and charge another—or advertise cars that aren’t really there
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