FTC Requires 5 Car Makers to Give Lease Costs

The Federal Trade Commission has approved an agreement with General Motors Corp. and the U.S. subsidiaries of four Japanese car makers to settle charges that the companies misrepresented the true costs of their vehicle leasing programs in advertisements.

The companies agreed to stop hiding some of the initial costs of a lease in the fine print and to eliminate rapidly spoken disclaimers in radio and television ads. In addition to GM, the agreement involves Irvine-based Mazda Motor of America Inc., Cypress-based Mitsubishi Motor Sales of America Inc., American Honda Motor Corp. in Torrance and American Isuzu Motors Inc. of Industry.

The settlement was reached in November but federal rules required a 60-day comment period before the FTC could give final approval.

Federal and state consumer-protection authorities had complained that the ads touted no down payments and low monthly fees but concealed additional charges, such as acquisition fees and security deposits. GM and Mitsubishi also settled charges that ads for their financing plans didn’t clearly disclose balloon payments that total several thousand dollars, the FTC said.

The federal settlement did not involve any fines, but in separate agreements with 23 states late last year, GM, Mitsubishi, Honda and Isuzu agreed to pay $12,500 each to 20 of the states--a total of $1 million--to help defray costs of a three-year investigation into their leasing advertisements.

Mazda, which also was hit with 24 state lawsuits over the ads, has negotiated separate settlements, a spokesman said. Terms were the same as in the FTC settlement, and Mazda reimbursed some of the states for the cost of their investigations.