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Auto lease dispute settled
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November 21, 1996: 9:06 p.m. ET
Automakers agree to spell out costs more clearly in lease advertising
From Correspondent Kelli Arena
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WASHINGTON (CNNfn) - Five major automakers on Thursday settled deceptive advertising charges relating to their auto leasing plans.
As part of the settlement with the United States Federal Trade Commission, the automakers agreed to provide consumers with clear cost information and not hide it in the fine print.
The offices of 23 state attorneys general also settled with General Motors Corp. , Mitsubishi Corp., Honda Motor, and Isuzu Motors Ltd. The FTC said 15 of those states also filed against Mazda Motor Corp.
The automakers will pay a total of $1 million to reimburse the states' costs of investigating the complaints. Three states did not accept the settlement so the remaining 20 will receive $50,000 apiece.
FTC Chairman Robert Pitofsky charged that the rapidly scrolling words and "mice type" lettering (350K QuickTime movie) used in television commercials amounted to misleading and deceptive advertising. (160K WAV) or (160K AIFF)
For instance, the FTC charged that:
- One TV ad offered leases on four Mazda vehicles with low monthly payments and "one penny down." However, the FTC said four "unreadable screens of fine print flashed briefly on the bottom of the screen" disclosed that consumers actually had to pay at least $900 at the lease's inception.
- A GM ad said consumers could buy a Buick Regal for $2,000 down and 30 $249 monthly payments. But the FTC said that "well within 11 lines of quickly scrolling unreadable fine print," the TV ad noted that consumers would also owe an $11,677.68 final balloon payment.
Arizona Attorney General Grant Woods said that examples like the one above can be "a pretty rude shock" to consumers coming in expecting to pay out much less money.
In a similar move to help make leasing more understandable, the United States Federal Reserve Board recently cracked down on how auto leases are written up.
The FTC said it was continuing to investigate advertising from other car companies.
However, in the end, it's up to consumers to look before they lease. 
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