Iowa’s Attorney General is taking action against Smart Automotive Group of Louisiana for “false-premise” used car sales promotions in Iowa. Most consumers will recognize such promotions as “emergency liquidation.” The suit claims that often these tactics are fictional, merely gimmicks to get customers onto the lot.
The suit claims that sale ads used by Smart Automotive trick customers into thinking that vehicles are being offered at special prices, when they are, in fact, part of the dealer’s used vehicle inventory. Terms like “Seized and Repossessed Vehicles,” “Emergency Disposal,” are used falsely and deceptively to mislead consumers.
The attorney general detailed Smart Automotive’s practice of selling promotional advertising packages to Iowa auto dealers. Designed to increase sales, these packages are created to trick consumers into thinking that the cars available are drawn from somewhere other than the dealer’s usual inventory. He calls this “deceptive advertising,” which leads consumers to believe that they are paying lower prices, when, in fact, prices are rarely reduced and sometimes even raised.
The suit goes on to allege that Smart Automotive used various other deceptive tactics (like scratch-off prize cards) to trick customers into coming into the dealership. These customers are then subjected to unwanted sale pitches. These sales pitches sometimes come from Smart Automotive’s own high-pressure sales teams.