Beware of Email Scam and FTC on Used-Vehicle Ads

April 7, 2017

Beware of Email Spoofing

SCADA had been notified on several occasions recently about “spoof” emails that have been sent to some of our Dealer members and their employees.  Today it happened to SCADA.  The spoofed email was sent using the forged email of the EVP and sent to the Director of Administration concerning finances.  It was quickly identified as suspicious. For example, the email’s grammar, font, and tone were suspicious. It implied that our EVP had a financial request that needed to be answered “right now” via email. If a request was needed that quickly, our EVP would have made a phone call or met with the Director of Administration directly.

For those not familiar with email “spoofing”, it is the forgery of an email header so that the message appears to have originated from someone or somewhere other than the actual source. Email spoofing is a tactic used in phishing and spam campaigns because people are more likely to open and respond to an email when they think it has been sent by a legitimate source.

If you receive an email that looks suspicious, better to be safe than sorry.  Check with the sender to make sure it is legitimate before responding.

FTC Finalizes Three More Consent Orders With Dealers Over Certain Used-Vehicle Ads

The Federal Trade Commission has approved three proposed consent orders with auto Dealer groups to resolve allegations that they advertised “how rigorously they inspect their used cars” without disclosing that some of the vehicles were subject to open safety recalls. Among other provisions, the consent orders prohibit the Dealers from representing – either expressly or by implication – when marketing, advertising, offering for sale, or selling used motor vehicles to consumers that the vehicles are safe, have been repaired for safety issues, or have been subject to a rigorous inspection, unless:

1. The vehicles are not subject to any open safety recalls, or

2. The Dealer discloses, in close proximity to such representation, any material qualifying information related to open recalls, including but not limited to:

• the fact that its used motor vehicles may be subject to recalls for safety issues that have not been repaired, and
• how consumers can determine whether an individual used motor vehicle is subject to an open recall for safety issues that has not been repaired.

In addition, if the Dealer receives a written notice from a manufacturer that a motor vehicle is subject to an open safety recall, the Dealer must provide to a consumer – prior to the consummation of the sale of the vehicle – the manufacturer notice or a document that conveys the same information using a substantially similar format. (As an alternative to providing the manufacturer notice, two of the three consent orders permit the Dealers to provide to consumers – prior to the consummation of the sale of a used motor vehicle – a written notice that conveys that the vehicle is subject to an open recall that is unrepaired and the safety risks associated with the recall that is made available by the National Highway Traffic Safety Administration (see safercar.gov) or a commercial provider of recall information.)

All of these disclosures and notices must be clear and conspicuous and not otherwise misleading.

These three finalized consent orders follow separate FTC consent orders with similar terms involving General Motors and two Dealer groups that were finalized in December 2016. Dealers are advised to review with legal counsel the full terms of these consent orders along with any applicable state law requirements to help assess the legal sufficiency of their used vehicle advertisements.