FTC names 97 dealership groups that received pricing warning letters

The Federal Trade Commission has intensified its scrutiny of auto retail pricing practices, sending warning letters to 97 dealership groups across the country over potentially deceptive advertising and pricing tactics. The move signals continued federal focus on transparency in vehicle sales, even as broader rulemaking efforts like the CARS Rule face legal and political uncertainty.

The Federal Trade Commission (FTC) announced that it has issued warning letters to 97 auto dealership groups, citing concerns over misleading pricing representations and add-on practices that may violate federal consumer protection laws. The action reflects the agency’s ongoing enforcement posture toward auto retail, particularly around advertising practices that obscure the true cost of vehicle purchases.

According to the FTC, the letters highlight practices such as advertising prices that exclude mandatory fees, misrepresenting discounts or rebates, and failing to clearly disclose add-on products. The agency warned that such conduct may violate the FTC Act’s prohibition on unfair or deceptive acts or practices.

While the FTC did not publicly accuse the dealerships of wrongdoing, the warning letters serve as a clear signal that enforcement actions could follow if problematic practices are not corrected. The agency has used similar warning campaigns in other sectors as a precursor to investigations or formal complaints.

Focus on “Junk Fees” and Add-Ons

A central concern outlined in the FTC’s communication is the use of add-on products and fees that are not clearly disclosed upfront. These can include:

• Service contracts and extended warranties

• GAP insurance and other finance-related products

• Dealer-installed accessories

• Documentation and processing fees

The FTC emphasized that consumers must be able to understand the full price of a vehicle without hidden or misleading charges. This aligns with the agency’s broader campaign against so-called “junk fees,” a priority that has also been echoed by the CFPB and the Biden administration more broadly.

Regulatory Context and CARS Rule Uncertainty

The warning letters come amid ongoing uncertainty surrounding the FTC’s Combating Auto Retail Scams (CARS) Rule, which aimed to impose stricter requirements on dealerships related to pricing disclosures and add-on consent. The rule has faced legal challenges and political opposition, leaving its ultimate fate unclear.

In the absence of a finalized rule, the FTC appears to be leveraging its existing enforcement authority to shape industry behavior. By targeting a large number of dealership groups simultaneously, the agency is signaling that it expects voluntary compliance with transparency standards even without new formal regulations.

Implications for Credit and Collection Professionals

For creditors, finance companies, and collection agencies operating in the auto space, the FTC’s action has several downstream implications:

• Increased scrutiny of retail installment contracts, particularly around financed add-ons

• Greater risk of disputes or complaints tied to unclear pricing or bundled products

• Potential litigation exposure if deceptive practices are found to affect loan enforceability

• Heightened expectations for compliance monitoring of dealer partners

This is particularly relevant for indirect auto lenders that rely on dealership-originated contracts. Ensuring that dealer practices align with federal and state consumer protection laws is becoming an increasingly critical component of third-party risk management.

State-Level Enforcement Likely to Follow

The FTC’s action may also prompt parallel scrutiny from state attorneys general and regulators, many of whom have already prioritized auto sales practices. States such as California, Massachusetts, and New York have been active in pursuing cases involving deceptive dealer fees and add-ons.

Given the dual enforcement environment, dealership groups—and their financing partners—should expect continued pressure to improve pricing transparency and documentation practices.

A Broader Signal to the Market

While the warning letters themselves do not carry penalties, they represent a strategic enforcement tool designed to drive industry-wide change. By naming 97 dealership groups, the FTC is effectively putting the broader market on notice.

For the credit and collection industry, the message is clear: upstream compliance failures in vehicle sales can quickly translate into downstream legal and operational risks. Monitoring dealership conduct is no longer optional—it is a necessary safeguard in an increasingly aggressive regulatory environment.