Federal Regulators Charge Florida Auto-Sales Telemarketers With Deceptive Marketing
On February 9th, 2022, the Federal Trade Commission (FTC) announced commercial fraud charges against a group of auto-sales telemarketing companies in Florida. The nation’s top business regulator alleges that consumers were bilked out of approximately $6 million due to deceptive marketing practices related to extended warranties. In this blog post, our West Palm Beach deceptive & unfair trade practices lawyers provide an overview of the allegations raised by federal regulators and explain an individual consumer’s right to bring a private action under the FDUTPA.
Allegations: Auto Dealers Materially Misrepresented Warranty Coverage
In a complaint filed in the United States District Court for the Southern District of Florida, the FTC alleges that American Vehicle Protection Corporation (AVP) and several other related defendants improperly took in nearly $6 million from consumers by materially misrepresenting the true extent of the warranty coverage being provided. AVP has its corporate headquarters in Pompano Beach, Florida. As represented to consumers, the extended warranty coverage being offered by American Vehicle Protection Corporation was:
- Full vehicle; and
- Came from the manufacturer.
However, the FTC alleges that there was far less than meets the eye provided with the warranty coverage in question. To start, the warranty coverage in question did not come from the manufacturer at all. Additionally, it provided very limited protection for vehicle repairs. Little was actually covered under the plan.
Note: There are also some specialized federal consumer protections in place related to telemarketing. AVP and the related defendants marketed and sold the extended warranty plans at issue in this case primarily by cold-calling consumers in Florida.
The FDUTPA Allows Individual Consumers to File a Deceptive Marketing Claim
The Federal Trade Commission Act (FTC Act) is a long-standing federal statute that prohibits the use of deceptive and misleading marketing strategies. Section 5 of the FTC does not contain a private right of action—meaning consumers must rely on regulators to take enforcement action against offenders. This can sometimes prove to be frustrating as federal regulators can be slow to take action against a business or organization that is allegedly using false advertising.
However, Florida’s Little FTC Act (The Florida Deceptive and Unfair Trades Practices Act) does have a private right of action. If you are a consumer who suffered financial harm because of a deceptive marketing practice in Florida, you can file an FDUTPA claim directly against the responsible business or organization. The FDUTPA allows you to seek compensation for your damages. For example, a consumer may be entitled to recover compensation for the cost that they paid for a product/service if they are a victim of deceptive marketing.
Consult With Our South Florida Deceptive Commercial Practices Lawyers Today
At Pike & Lustig, LLP, our Florida fraud lawyers have the skills, knowledge, and experience to represent consumers who are preparing to file a claim under the FDUTPA. If you or your loved one suffered financial losses because a business engaged in deceptive marketing, we are more than ready to get started on your case. Contact us today for a completely confidential consultation. We handle FDUTPA claims throughout South Florida, including in West Palm Beach, Wellington and Miami.