Wednesday, 24 October 2018 18:08

Fake Recall Notices Get Car Dealers in Trouble With FTC

Written by David A. Wood, CarComplaints.com


We thank CarComplaints.com for reprint permission.


Fake recall notices have caused DC-area car dealers to settle a Federal Trade Commission (FTC) complaint that accuses the dealerships of mailing more than 21,000 fake "urgent recall" notices to consumers in 2015 and 2017.


According to the FTC, the dealers and a marketing firm agreed to settle the deceptive advertising charges that allege the notices were mailed to convince car owners to visit the dealerships.


The car dealers do business as Passport Toyota, Passport Nissan of Alexandria, VA, and Passport Nissan of Marlow Heights, MD. The marketing company, Temecula Equity Group, LLC, does business as Overflowworks.com and is located in California.


Considering the huge number of vehicles on the roads that have open (unrepaired) recalls, the government has taken measures to combat fake recall notices sent by companies to convince owners to visit dealerships. The National Highway Traffic Safety Administration (NHTSA) estimates 30 percent of drivers completely ignore recall notices, even if the safety defects could cost lives.


In 2014, NHTSA announced that all manufacturers must use distinctive labels for recall mailings to consumers, using white, uppercase letters against a red background.


According to NHTSA, the recall label is intended to "help protect consumers from misleading sales and marketing materials that mimic, in their wording and presentation, legitimate safety recall alerts from manufacturers that can lead owners to purchase costly products and services that have no connection to a legitimate safety recall."


However, the FTC says the DC-area car dealers sent fake recall notices that used the same color scheme as official notices sent by automakers. The government says the vast majority of vehicles covered by the fake recall notices did not have open recalls, even though the notices said, “URGENT RECALL NOTICE” in large, bold-faced uppercase letters.


On the reverse side, it said, "VEHICLE RECALL NOTICE" and "WARNING" in large red and black bold-faced, uppercase letters on a white background.


The FTC complaint alleges Passport first sent about 7,000 Toyota fake recall notices in 2015, and then the dealers sent about 14,000 notices to Nissan customers in June 2017. Those fake notices were mailed even though numerous complaints were made after the first notices were sent in 2015.

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