When Jerry Voegler, the Executive Director of the South Dakota Independent Auto Dealers Association, asked me to come to Deadwood to do a legal session for his dealers, I jumped at the chance. My wife and I had never been to that part of the world, so we treated it as a mini-vacation. We saw Mount Rushmore, the Crazy Horse Memorial, Spearfish Canyon, Roughlock Falls, and Horsethief Lake, and took in the spectacular scenery from Needles Highway.
From the road, as we traveled, we saw one unusual thing after another. Where else will you see a sign for “Croft’s Saddlery” or billboards for “Red Ass Rhubarb Wine”? We passed on the Red Ass, but dropped in on the Stone Faces (Mt. Rushmore … get it?) Winery. We saw motorcycles everywhere (mostly Harleys), along with old cars, and a large herd of people driving Jeeps stayed overnight at our hotel.
The hotel was a little on the rustic side but was on a par with a lot of the better hotels we’ve stayed in, and the restaurant was remarkably good. I’d just come from Vegas and was worn out from steak houses, so on the first night I tried the walleye. It was so good and fresh that I had it twice more before we left.
Jerry’s conference seemed to be a smashing success – well attended with a lot of vendors. My legal session was lively with dealer participation. Now, before you lunge for your computers and phones to remind me that this is supposed to be a legal column, let me turn to a thought I had on this trip that might be worth passing along.
At Jerry’s conference, one of the speakers preceding me was Chip Perry of AutoTrader. Chip did his usual excellent job of walking the dealers through effective and ineffective ways of selling cars on the Internet. About halfway through his presentation, a little light bulb in my head switched on. Chip hadn’t said anything that was incorrect, but just that morning I had been perusing the dealer ads in the Rapid City paper looking for federal advertising violations. (I know that I need to get a life, but that’s another problem.) As usual, I found several, but as I did I thought to myself, “Right, the Federal Trade Commission is going to subscribe to the Rapid City paper and papers from all over the U.S. so that it can go after dealers for advertising violations.” Pigs will fly first.
But as Chip talked about dealer websites, I had a flash! Guess what? The FTC has Internet access! Yep, all of those Internet websites set up to draw customers to the dealerships also serve as regulatory windows the FTC, the Consumer Financial Protection Bureau, and other regulators can use to take a look at some of the practices of dealers. Of course, advertising violations come to mind first, but I’ve seen things on websites that would form the basis for claims under the federal Truth in Lending Act and the Equal Credit Opportunity Act, as well as claims under state unfair and deceptive acts and practices laws. Keep in mind that it isn’t just the FTC and the CFPB that dealers need to worry about – I have it on good authority that more than a few plaintiffs’ class action lawyers also have Internet access.
Twenty years ago, the far reaches of South Dakota might have been far from the ebb and flow of consumer credit enforcement actions. Now, dealers in that area and all over the country are just a regulatory mouse click away. Is it time for a legal review of your website and your Internet sales practices?
Thomas B. Hudson is a partner in the Maryland office of Hudson Cook, LLP. Tom can be reached at 410-865-5411 or by email at thudson@hudco.com.
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