Automotive marketing firm banned from industry under FTC order

A marketing services company and its owner will be banned from the auto industry under an order issued by the Federal Trade Commission after the Commission found they had unlawfully misled consumers into believing that their websites were affiliated with a government stimulus program and that they had sent misleading pricing emails to consumers. they had supposedly won.

In notice and order released in October, the Commission ruled that Traffic Jam Events, Inc. and its owner, David J. Jeansonne, II, violated both the FTC and the Truth in Lending Act (TILA). The Commission found that the company’s practices were misleading and unfair to consumers in multiple ways.

The Commission found that the company had sent numerous misleading letters to lure consumers to auto sales sites by suggesting that these sites were affiliated with a government COVID-19 stimulus program when in fact sales were not making not part of such a program. The senders included lines such as “IMPORTANTS COVID-19 ECONOMIC STIMULUS DOCUMENTS ENCLOSED,” displayed the likeness of the Great Seal of the United States, and contained a forged check, titled “Stimulus Relief Program.”

Additionally, the Commission determined that Traffic Jam and Jeansonne sent out direct mail advertisements that misrepresented that consumers had won specific, valuable prizes, such as $2,500 or $5,000 in cash, that they could win once they got to the car dealership.

However, by showing up to claim the prizes, consumers would learn that they had not won the stated prize. The opinion cites complaints from consumers who responded to shippers who promised a large sum of money and were offered nominal door prizes instead, including one who drove an hour to a dealership only to find out that he “came in for money, came out with counterfeit airpods. ”

The Commission noted that the company and Jeansonne persisted in making these illegal price mailings despite entering into three prior consent orders with state authorities who identified their advertisements as misleading.

The Commission also found that the company’s mailers violated TILA’s advertising requirements for “open-ended loans” such as auto loans. Specifically, company shippers prominently cited monthly payments for vehicle purchases on credit, but either failed to provide, or concealed in fine print, key legally required financing terms that consumers need to determine the true cost of advertised loans.

The Commission’s order prohibits Traffic Jam and Jeansonne from advertising, selling or leasing automobiles for 20 years. The order also prohibits them from misrepresenting any material fact while marketing any product or service of any kind, as well as any other violation of TILA’s disclosure requirements.

The Commission’s vote to issue the Notice and Order in this matter was 4-0. The respondents asked the Fifth Circuit Court of Appeals to review the Board’s notice and order.

REMARK: When the Commission makes a final order, it has the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $46,517.

Aurora J. William