Chrysler, Ad Agencies Settle FTC Charges on Lease Terms

Chrysler Corp. and two advertising agencies settled charges they misrepresented auto leasing terms in television commercials, burying the facts in tiny graphics that were almost impossible to read, the government said Thursday.

Chrysler and the ad agencies began the campaign even though the Federal Trade Commission had already brought suit against seven other car makers for similar charges of misleading customers, the FTC said in announcing the settlement.

“These cases are part of the FTC’s campaign to clean up misleading auto advertising,” said Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection.

“Chrysler showed one car in the television ad but gave the terms for another car,” a less-expensive standard model, said David Medine of the FTC’s Bureau of Consumer Protection, describing one of the allegations.

In the ads, Chrysler explained that the car and the terms did not go together, but the explanation was buried in fine print that appeared so briefly on the screen that it could not be read, Medine said.

Also charged and settling the case were Bozell Worldwide Inc., the auto maker’s principal ad agency, based in New York, and Martin Advertising Inc., a regional ad agency in Birmingham, Ala.

The FTC also said that, among other things, Martin failed to provide an adequate explanation to consumers that they would wind up owing more than $9,000 at the end of the lease.

None of the companies involved admitted fault as is standard in consent decrees. But they promised not to engage in such practices in the future. The FTC lacks authority to assess or seek fines for past behavior in such cases, but could haul the company into court if it violates the agreement.

Lewis Goldfarb, associate general counsel of Chrysler, dismissed the suit as “almost a technical matter that came up late last year. It’s part of the FTC’s several-year effort to try to improve consumer lease advertising.”

He said that although his firm disagreed with the FTC allegation that Chrysler violated the law, the firm had “stopped the advertising immediately, as soon as they brought it to our attention.”