The FTC is cracking down on dealers that use deceptive practices to put buyers into bad deals.

A Federal Trade Commission investigation into auto dealers across the U.S. resulted $2.6 million in consumer refunds and other fees and fines for criminal and civil violations.

Civil and criminal charges coming about as a result of “Operation Ruse Control,” included deceptive advertising, automotive loan application fraud, odometer fraud, deceptive add-on fees, and deceptive marketing of car title loans.

The commission, also known as the FTC, instituted 252 enforcement actions – 187 in the U.S. and another 65 in Canada – and it appears that more could be on the horizon. It’s the second time in the agency has discovered problem with auto dealers. It turned up 10 infractions last year related to loans and advertising.

“The clear message is that across this country, and indeed internationally, law enforcement agencies are on the lookout for deceptive and illegal practices by auto dealers, and will take whatever action is necessary to protect consumers,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.

“Car ads must be truthful, loan terms must be clear, and dealer practices must be honest,” she added. “That’s why our partners are working together to crack down on deceptive marketing about car sales, leasing and financing.”

The FTC received expanded authority over auto dealers recently under the Dodd-Frank Act and in addition to violations related advertising and loan and leasing fraud, it’s tackling add-ons, which is the practice of a dealer or other third party adding to the vehicle sales, lease, or finance agreement charges for other products or services.

A few examples include extended warranties, payment programs, guaranteed automobile protection (commonly called GAP or GAP insurance), credit life insurance, road service, theft protection and undercoating.

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The agency provided some examples of what they discovered.

National Payment Network Inc. (NPN), in San Mateo, California, offered a program that gave buyers a small discount if they agreed to have payments automatically taken from their bank accounts. However, the fees charged to set up the program offset the savings. For example, a standard five-year auto loan would charge $775 in fees.

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In a related case, the FTC alleged that Matt Blatt dealerships, with multiple locations in New Jersey, violated the FTC Act by failing to disclose or adequately disclose the fees associated with NPN’s add-on service and that many consumers would not save money overall due to the program’s significant fees. Matt Blatt dealerships received a commission for each of the more than 1,000 consumers they enrolled.

Both agreed to settle cases against them. NPN is refunding $1.5 million to customers and waiving an additional $949,000 to customers during the waiver period while Blatt will pay $184,000 in fees.

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Cory Fairbanks Mazda of Longwood, Florida; Jim Burke Nissan of Birmingham, Alabama; and Ross Nissan of El Monte, California, were all charged with false advertising for promoting sales, as well as lease or finance options, without disclosing relevant terms, such as required down payments. In the end, the FTC said any value of the offer was canceled out by “fine-print disclaimers.” The dealers agreed to settle with the FTC.

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