{"id":1077,"date":"2024-10-16T19:27:24","date_gmt":"2024-10-16T19:27:24","guid":{"rendered":"https:\/\/www.autobuyersmarket.com\/news\/?p=1077"},"modified":"2025-05-05T10:25:26","modified_gmt":"2025-05-05T10:25:26","slug":"appeals-court-weighing-nada-challenge-to-ftc-combating-auto-retail-scams-cars-rule","status":"publish","type":"post","link":"https:\/\/www.autobuyersmarket.com\/news\/2024\/10\/16\/appeals-court-weighing-nada-challenge-to-ftc-combating-auto-retail-scams-cars-rule\/","title":{"rendered":"Court Weighing NADA Challenge to FTC’S Combating Auto Retail Scams (CARS) Rule"},"content":{"rendered":"\n
\"FTC\"
Originally, the rule was slated to go in to effect on June 30, 2024; however, NADA\u2019s challenge has delayed that rollout pending the outcome of the case, which the Court of Appeals began actively looking into on October 9. File photo: T. Schneider, ShutterStock.com, licensed.<\/figcaption><\/figure>\n\n\n\n

WASHINGTON, D.C. – The 5th U.S. Circuit Court of Appeals is\u00a0currently weighing the merits of a challenge<\/a>\u00a0brought against the Federal Trade Commission\u2019s (FTC) Combating Auto Retail Scams (CARS<\/a>) Rule \u2013 which would make it illegal for a dealer to make misrepresentations about certain topics that would affect a consumer\u2019s buying or leasing choices \u2013 by the National Automobile Dealers Association and Texas Automobile Dealers Association (collectively known as \u201cNADA\u201d).<\/p>\n\n\n\n

The CARS Rule addresses several issues that consumers have complained about in recent years, including fraudulent behavior on the part of unscrupulous sellers such as bait-and-switch tactics, so-called \u201cjunk fees\u201d<\/em> added to the purchase prices of the vehicles for \u201cunnecessary<\/em>\u201d services such as certification, reconditioning, or inspections, and deceptive claims about price, financing, or add-ons.<\/p>\n\n\n\n

Originally, the rule was slated to go in to effect on June 30, 2024; however, NADA\u2019s challenge has delayed that rollout pending the outcome of the case, which the Court of Appeals began actively looking into on October 9.<\/p>\n\n\n\n

NADA contends that the FTC bypassed important procedural steps when developing the CARS Rule \u2013 quickly releasing draft regulations and cost-benefit analyses as opposed to providing advance notice of proposed rulemaking (ANPR<\/a>) to allow the holding of public comment sessions in order to get feedback \u2013 and is asking the court to either send it back to the FTC for major revisions or to overturn it outright.<\/p>\n\n\n\n

NADA also challenged the FTC\u2019s claim that the CARS Rule would shave off up to three hours of the car-buying process for consumers, saying that no data was supplied to substantiate that claim.<\/p>\n\n\n\n

In contrast, the FTC claimed that they had done nothing wrong in how they rolled out the CARS Rule draft, saying that \u2013 due to the\u00a0Dodd-Frank Act<\/a>\u00a0\u2013 the agency was not required to provide an ANPR prior to proposing the rule, and that the justification of the rule\u2019s cost-benefit analysis is not subject to judicial review. As for the three hours saved claim, the FTC said they had generated that estimate by referring to data pulled from the 2020 Cox Automotive Car Buyer Journey Study<\/a>.<\/p>\n\n\n\n

The court will also determine the potential financial and regulatory burdens that could be imposed upon automotive dealerships <\/a>if the CARS Rule were to go into effect, and if they would be considered unduly harsh.<\/p>\n\n\n\n

Until the court\u2019s judgement, the fate of the CARS Rule remains effectively in limbo.<\/p>\n","protected":false},"excerpt":{"rendered":"

WASHINGTON, D.C. – The 5th U.S. Circuit Court of Appeals is\u00a0currently weighing the merits of a challenge\u00a0brought against the Federal Trade Commission\u2019s (FTC) Combating Auto Retail Scams (CARS) Rule \u2013 which would make it illegal for a dealer to make misrepresentations about certain topics that would affect a consumer\u2019s buying or leasing choices \u2013 by […]<\/p>\n","protected":false},"author":4,"featured_media":1078,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-1077","post","type-post","status-publish","format-standard","has-post-thumbnail","category-market-updates","entry"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\n\t\t\n