Proposed Text
Part I
General Provisions
24VAC22-30-10. Intent. (Repealed.)
In the 1989 Acts of the Virginia General Assembly it was
found that it is in the interest of the consuming public and legitimate motor vehicle
dealers to ensure that the advertising of motor vehicles is honest, fair, and
clear and that deceptive or misleading advertising of the retail sales of motor
vehicles as described in Motor Vehicle Dealer Advertising, Article 9 (§
46.2-1580 et seq.) of Chapter 15 of Title 46.2 of the Code of Virginia should
be prohibited. In the 1995 Acts of the Virginia General Assembly it was found
that it is in the interest of the consuming public and legitimate motor vehicle
dealers for dealers to be regulated by a board of their peers, resulting in the
formation of the Virginia Motor Vehicle Dealer Board. Therefore, the following
regulations are promulgated by the board to administer the administrative and
civil penalties necessary for enforcement of prohibited advertising practices.
Part I
General Provisions
24VAC22-30-20. Definitions.
The following words and terms, when used in this
chapter, shall have the following meanings unless the context clearly
indicates otherwise:
"Act" means Chapter 15 (§ 46.2-1500 et seq.) of Title 46.2 of the Code of Virginia.
"Administrative penalties" means the denial, suspension or revocation of a license as allowed in § 46.2-1576 of the Act and based on one or more of the grounds specified in § 46.2-1575 of the Act.
"Advertisement" means an oral, written, graphic or
pictorial statement made in the course of soliciting business, including,
without limitation, a statement or representation made in a newspaper,
magazine, or other publication, or contained in a notice, sign, poster,
display, circular, pamphlet, or letter, or on radio, the Internet, or via an on-line
online computer service, or on television. The term does not include an
in-person oral communication by a dealer's employee with a prospective customer.
"Advertiser" means same as licensee.
"Board" means the Motor Vehicle Dealer Board of this Commonwealth.
"Civil penalty" means the monetary assessment imposed by the board or the executive director against a licensee not to exceed $1,000 for any single violation of § 46.2-1581 of the Code of Virginia.
"Disclaimer" means those words or phrases used to provide a clear understanding or limitation to an advertised statement but not used to contradict or change the meaning of the statement.
"Disclosure" means a statement in clear terms of the dollar amounts, time frames, down payments and other terms which may be needed to provide a full understanding of credit terms, periodic payment, interest rates, time payment plans, etc.
"Executive director" means the Executive Director of the Motor Vehicle Dealer Board of this Commonwealth.
"Internet" means the international network of computer systems commonly known as the "Internet".
"License" means the document issued to a Virginia motor vehicle dealer and which permits such dealer to engage in the business of buying and selling new and used motor vehicles or used motor vehicles only.
"Licensee" means any person, partnership, association, corporation or entity which is required to be licensed as a motor vehicle dealer in this Commonwealth.
"Line-make marketing group" means an association of motor vehicle dealers franchised to sell and advertise the same line-make of new motor vehicles.
"Manufacturer's factory invoice" or "distributor's invoice" means that document supplied by the manufacturer or the distributor listing the manufacturer's or distributor's charge to the dealer before any deduction for items such as holdback, group advertising, factory incentives or rebates, or any governmental charges.
"New motor vehicle" means a vehicle which meets
all of the following criteria. The new motor vehicle has: the same as
defined in § 46.2-1500 of the Code of Virginia.
1. Had limited use necessary in moving or road testing the
vehicle prior to delivery to a customer;
2. Been transferred by a manufacturer's or distributor's
certificate of origin which is the document provided by the manufacturer of a
new motor vehicle, or its distributor to its franchised motor vehicle dealer;
3. The manufacturer's or distributor's certification that it
conforms to all applicable federal motor vehicle safety and emission standards;
4. Not been previously sold by a dealer except for the
purpose of resale and when the exchange is between franchised dealers of the
same line-make;
5. Not been used as a rental, driver education, or
demonstration motor vehicle; and
6. Not been used for the personal and business
transportation of the manufacturer, distributor or dealer or any of their
employees.
"On-line "Online service" means
any information service, system, or access software provider that enables
computer access by multiple users to a computer server, including specifically
a service or system that provides accesses to the Internet.
"Repossessed vehicle" means a vehicle which meets all of the following criteria. It has:
1. Been sold, titled, registered, and taken back from a purchaser for nonpayment; and
2. Not yet been resold to an ultimate user.
"Sale" means there is a significant reduction from the advertiser's usual and customary price of a motor vehicle and the offer is for a limited period of time.
"Used motor vehicle" means any vehicle other than
a new motor vehicle as defined in this chapter the same as defined in § 46.2-1500
of the Code of Virginia.
Part II
Regulated Advertising Practices
24VAC22-30-30. Practices.
For purposes of this chapter, a violation of the following regulated advertising practices shall be an unfair, deceptive, or misleading act or practice.
A. New motor vehicle. A motor vehicle shall not be advertised as new, either by word or implication, unless it is one which conforms to the definition of a "new motor vehicle" as defined in 24VAC22-30-20.
B. Used motor vehicle.
1. The fact that a motor vehicle is used should be clearly and
unequivocally expressed by the term "used" or by such other term as
is commonly understood to mean that the vehicle is used. For example,
"special purchase" or "program cars" by itself is not a
satisfactory disclosure; however, such terms as "demonstrator"
"pre-owned" or "former leased and/or rental
vehicles" used alone clearly express that they meet the definition of a
used vehicle for advertising purposes. When in doubt, the dealer should provide
more information or simply say "used."
2. Once a certificate of origin as defined in § 46.2-1500 has been assigned to a purchaser, the motor vehicle becomes a used vehicle and must be advertised as such.
C. Finance charges or interest rates advertisements. 1.
Advertisements of finance charges or other interest rates "below
market" (or words to that effect) shall not be used unless it is
manufacturer or distributor sponsored or substantiated by a written agreement
with the finance source.
2. Advertisement of finance charges or other interest rates
shall not be used when there is a cost to buy-down said charge or rate which is
passed on, in whole or in part, to the purchaser.
D. Terms, conditions, and disclaimers.
1. When terms, conditions or disclaimers are used, they shall always be stated clearly and conspicuously. An asterisk or other reference symbol may be used to point to a disclaimer or other information; but, the disclaimer shall not be used as a means of contradicting or changing the meaning of an advertised statement. In addition, they must meet the Federal Trade Commission Truth in Lending Act Requirements 15 USC §§ 1601 et seq., 12 CFR Part 226 (Regulation Z) or the Federal Trade Commission Truth in Leasing Act Requirements, as applicable.
2. In all printed media, where terms, conditions or disclaimers
are used, they shall be clearly and conspicuously visible and printed in not
less than 8-point type print or printed in 6-point upper case type print. If a
processing fee or freight charges or destination charges, or
both, are not included in the advertised price, the amount of any such processing
fee and freight charge or destination charge, or both, must
be clearly and conspicuously disclosed in [not less than 8-point]
boldface type or [that is] not smaller than [8-point, unless
the advertisement is in less than 8-point type in which case not smaller than]
the largest typeface within the advertisement. If the a
processing fee is not included in the advertised price, the amount of the
processing fee must be clearly and conspicuously disclosed in not less than
8-point boldface type or not smaller than the largest typeface within the
advertisement; however the amount of the processing fee may be omitted from
any advertisement in which the largest type size is less than 8-point typeface,
so long as the dealer participates in a media-provided listing of processing
fees and the dealer's advertisement includes an asterisk or other such notation
to refer the reader to the listing of the fees. When billboards, portable
signs, posters, etc., are used, all terms, conditions or disclaimers need to be
displayed and phrased in a manner which is clear and conspicuous.
3. In radio advertisements, where all terms,
conditions, or disclaimers are used, they shall, and
required disclosures must be clearly announced during the advertisement.
They must be explained clearly and at an understandable speed and volume level.
4. In television advertisements, where all terms,
conditions, or disclaimers are used, they shall, and
required disclosures must be clearly and conspicuously displayed or
announced, or both, during the advertisement. They shall be at an
understandable speed or understandable volume level, or both.
5. In Internet advertisements all terms, conditions, disclaimers, and required disclosures must be clearly and conspicuously displayed.
E. Sale or sales. The expiration date of an advertised "sale" shall be clearly and conspicuously disclosed. If the sale exceeds 30 days, the advertiser should be prepared to substantiate that the offering is indeed a valid reduction and has not become his regular price.
F. "List price," "sticker price," "suggested retail price." These terms and similar terms shall be used only as follows:
1. In reference to the manufacturer's or distributor's suggested retail price for new vehicles; or
2. The dealer's own usual and customary price for used vehicles.
G. "Cost" and "invoice price" terms.
1. "At cost," "below cost," "$ off cost" shall not be used in advertisements because of the difficulty in determining a dealer's actual net cost at the time of sale.
2. "Invoice price," "$ over invoice," may be used, provided that the invoice referred to is the manufacturer's factory invoice, distributor's invoice, or a bona fide bill of sale, as applicable, and that it is available for customer inspection.
3. "Manufacturer's factory invoice" or "distributor's
invoice" means that document supplied by the manufacturer or the
distributor listing the manufacturer's or distributor's charge to the dealer
before any deduction for items such as holdback, group advertising, factory
incentives or rebates, or any governmental charges.
H. Price or credit terms of advertised vehicles. When the
price or credit terms of a vehicle are advertised in print, or on radio or
television, the vehicle should be fully identified as to year, make, and
model. In addition, in all advertisements placed by individual dealers and not
marketing groups, the advertised price or credit terms shall include all
charges which the buyer must pay to the seller including "freight" or
"destination charges." If there are deferred payments on credit sales
where accrued finance charges are ultimately charged to the consumer for any
part of the deferred period, then these charges must be clearly stated. State
and local fees and taxes and buyer-selected options need not be included in the
advertised price. If the buyer will be required to pay to the seller charges
which increase the advertised price, the charges must be disclosed as set-out
in subsection D of this section and priced in the advertisement.
I. Matching or bettering competitor's price advertisements.
Advertisements which that set out a policy matching or bettering
a competitor's price shall not be used unless the terms of the offer are
specific, verifiable, and reasonable. All terms of the offer shall be included
in the disclosure and disclaimer area and may not say such things as
"rules or terms available in showroom" or "available before
delivery." Any material or significant conditions which that
must be met or the evidence the consumer must present to take advantage of the
offer must be fully disclosed as a part of the advertisement.
J. Advertisements of dealer rebates shall not be used. Offers to match down payments or guarantee minimum trade-in allowances or offers of cash or money back are forms of dealer rebates.
K. "Free," "at no extra cost" terms. No equipment, accessory, other merchandise or service shall be described using any term that implies that such equipment, accessory, other merchandise or service is free if a purchase is required in order to receive the "free" offer. Examples of prohibited terms include:
1. Free.
2. Complimentary.
3. At no extra cost.
4. At no extra charge.
5. At no extra fee.
6. At no extra price.
7. At no additional cost.
8. At no additional charge.
9. At no additional fee.
10. At no additional price.
11. Present.
12. Gift.
13. On the house.
14. Gratis.
15. Courtesy.
L. "Bait advertising" shall not be used.
1. The purpose of this section is to ensure that customers will
be informed the vehicle is in limited quantity or availability. If a specific
vehicle is advertised, the seller shall be in possession of a reasonable supply
of said vehicles and they shall be available at the advertised price. If the
advertised vehicle is available only in limited numbers or only by order, that
shall be stated in the advertisement. The listing of vehicles by stock numbers
or vehicle identification numbers is permissible and is one means of
satisfactorily disclosing a limitation of availability, provided a separate
number is used for each vehicle. For new vehicles, if the offer is limited, you
the dealer will be able to say such things as "in stock" or
"will order" provided you the dealer can order the
vehicle just as advertised and delivery can be assured as soon as the
manufacturer or distributor can confirm the order and deliver it to your
the dealer's dealership. If you the dealer cannot get an
order confirmation within 30 days, you the dealer must refund all
moneys collected from the buyer at his request. If the vehicle is available only
by order then it must be clearly and conspicuously disclosed in the
advertisement.
2. Advertising a vehicle at a certain price (including "as low as" statements), but having available for sale only vehicles equipped with dealer added cost "options" which increase the selling price above the advertised price, may also be considered "bait advertising."
3. If a lease payment is advertised, the fact that it is a lease arrangement shall be disclosed.
M. The term "repossessed vehicle" shall not be used unless the full criteria of the definition in 24VAC22-30-20 is met. Advertisers offering such vehicles for sale shall provide proof of repossession upon request.
N. "Finance" or "loan." Words such as "finance" or "loan" shall not be used in a motor vehicle dealer advertiser's firm name or trade name unless that person is actually engaged in the financing of motor vehicles.
O. "Special arrangement or relationship" advertisements. Statements such as "big volume buying power," "manufacturer's outlet," "factory authorized outlet," and "factory wholesale outlet," shall not be used. Any term that gives the consumer the impression the dealer has a special arrangement with the manufacturer or distributor as compared to similarly situated dealers, is misleading and shall not be used.
P. Records retention. Advertisers Licensees
shall maintain for a period of 60 days from the expiration date of the
advertisement and make available to the board and the board staff, if
requested, the original or a clear facsimile copy copies of all radio
and television advertisements in a manner that permits systematic
retrieval for a period of 60 days subsequent to the expiration date of the
advertisement.
Part III
Enforcement
24VAC22-30-40. Administrative and civil penalties.
A. Violations of any regulated advertising practice
may, in the discretion of the board or executive director, be addressed by a verbal
or written warning to the licensee as an initial step in the enforcement
process.
B. Any single violation of a regulated advertising practice
may also, after an informal fact finding proceeding as provided in the
Administrative Process Act, § 9-6.14:1 et seq. of the Code of Virginia, result
in an assessment of a civil penalty up to $1,000.
C. Subsequent, same or similar violations may, after an
informal fact finding proceeding as provided in the Administrative Process Act,
§ 9-6.14:1 et seq. of the Code of Virginia, result in an assessment of a civil
penalty up to the $1,000 and may also be grounds for denying, suspending or
revoking a license subject to the hearing requirements pursuant to § 46.2-1576
of the Act, either or both.
24VAC22-30-50. Appeals. (Repealed.)
The action of the board in suspending, revoking or refusing
any license or in imposing a monetary civil penalty against the licensee shall
be subject to judicial review as provided in §§ 46.2-1577 and 46.2-1578 of the Act.