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Tennessee Fraud Laws

Posted by Tamara

A recent settlement under Tennessee fraud laws ensures that auto dealers don’t engage in false advertising. Specifically, the state Attorney General targeted G& A Marketing, a firm that advertised used cars as “fleet liquidations” caused by the bankruptcy of a major rental car company.

“The problem is that such ads mislead customers into thinking vehicles must be sold quickly and at bargain prices, when that is not the case,” the state Attorney General said. “Consumers are misled, and sometimes they end up paying prices that are even higher than normal.”

Gunning & Associates Marketing, Inc., of Milford, Tennessee, entered a formal assurance of compliance with Tennessee and nine other states that it will not make or imply false claims about the sources of vehicles or make other false claims. The company also will pay a total of $300,000 to the states.

While G&A Marketing admitted no wrongdoing, they agreed to cease the deceptive advertising. One ad created by G&A Marketing for a “sales event” began with a large headline reading “Major Rental Car Company Has Gone Bankrupt.” A major rental car company filed for Chapter 11 reorganization bankruptcy recently, but the vehicles touted in the sale had nothing to with that.

“We alleged that such representations are designed to give the false impression that the sales offer rock-bottom prices,” the state Attorney General said. “Dealers are always free to advertise used cars for sale, but the claims they make must be truthful and not deceptive. The ads involved in this settlement didn’t make the grade.”

The states said that “sales events” often included G&A personnel being involved in vehicle sales, and they noted that Gunning sales staff used very aggressive sales tactics designed to maximize profit, not to offer lower-than-usual prices to consumers. The Attorney General said today that the Tennessee company must change its tactics when it provides ads and promotions to dealers in Tennessee and other states for used-car “sales events.”

The company’s previous ad campaigns were in violation of Tennessee fraud laws. “We alleged that G&A Marketing created ‘false-premise’ ads,” the Attorney General said, “such as falsely representing that vehicles were from sources such as rental car company bankruptcies, bank repossessions, or fleet liquidations.

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