State statutes regulate advertisements placed by licensed motor vehicle dealers, manufacturers, distributors and wholesalers (collectively referred to here as “licensees”) in North Carolina. By statute, an advertisement placed by a licensee in a newspaper or other publication in the state must include the actual name of the licensee.[211] In other words, for example, licensees cannot lawfully place classified advertisements that appear to be offering motor vehicles for sale by private individuals.
The state statutes also prohibit licensees from “[k]nowingly advertising by any means, any assertion, representation or statement of fact which is untrue, misleading or deceptive in any particular” relating to their license or conduct with regard to the sale of motor vehicles in the state and from using “unfair methods of competition or unfair deceptive (sic) acts or practices.”[212] The state attorney general has opined that it is unfair or deceptive for a licensee to advertise the retail price of a motor vehicle without including all of the charges that the consumer will ultimately have to pay, except for state sales tax.[213] The statutes also prohibit licensed motor vehicle dealers, manufacturers, distributors and wholesalers from “[k]nowingly advertising a used motor vehicle for sale as a new motor vehicle.”[214] In addition, no one may lawfully advertise in North Carolina any device for sale, installation or use that will alter the actual number of miles recorded by odometers on motor vehicles.[215]
Provisions in the federal Truth in Lending Act (TLA)[216] and Consumer Leasing Act (CLA),[217] along with corresponding federal rules that implement these statutes, regulate consumer credit and lease offers including those advertised in connection with motor vehicle sales and leasing. However, media are exempt from liability for disseminating an advertisement that violates either the TLA[218] or the CLA.[219] For example, under the CLA, an advertisement for a consumer lease that includes a specific lease payment, or states that “no initial payment” is due, must include a clear and conspicuous disclosure of specified information including the fact that the advertised transaction is a lease, the total amount of all initial payments the consumer must make, the amount of any security deposit, and the number and total amount of all payments due under the lease.[220] In addition, under the CLA, there are requirements for broadcast radio advertisements for consumer leases to provide alternate means for consumers to obtain more information, such as a print advertisement in a newspaper that circulates generally in the same market served by the radio station that broadcasts the advertisement.[221] Such print advertisements must run for three days prior to the broadcast of the related radio advertisement and then for 10 days afterward.[222]
State statutes also regulate advertising for automobile repairs and rentals in North Carolina. Businesses that advertise the cost of a specified vehicle repair also must disclose any additional charges that routinely apply to that type of repair, except for taxes and other fees that are required by law.[223] If the advertisement fails to comply with these statutory requirements, the consumer is required to pay only the advertised price. In addition, advertising in violation of these requirements is defined as an unfair trade practice under the state Unfair and Deceptive Trade Practices Act (UDPTA)[224] although, as mentioned earlier in this chapter, media outlets are immune from liability under the UDPTA unless they publish an advertisement with actual knowledge that it violates the act.[225]
Rental car companies that advertise in the state must include the full and actual rate – exclusive of taxes and mileage charges – that consumers will be charged to rent a vehicle for a specified time period.[226] Any restrictions that apply to the advertised rate – such as mileage or geographic driving limitations – must be “clearly disclosed” in the advertisement.[227] Additionally, rental car advertisements must disclose the daily rate the company charges for collision damage waivers but must advise consumers that such waivers are not required and that they should verify whether their own automobile insurance covers damage to automobiles they rent.[228] Finally, if a rental car company advertises a rental rate for an airport location, then the advertisement must “clearly and conspicuously disclose the existence and actual amount of the airport charges or fees.”[229]
[211] N.C. Gen. Stat. § 20-290(a), (c).
[212] N.C. Gen. Stat. § 20-294(6), (7).
[213] Op. of Att’y Gen. to Mr. Gonzalie Rivers, License and Theft Div., Dep’t of Motor Vehicles, 43 N.C.A.G. 135 (1973).
[214] Id. at (8).
[215] N.C. Gen. Stat. § 20-342 (also defining the “true mileage” of a motor vehicle as the “mileage driven by the vehicle as registered by the odometer within the manufacturer’s designed tolerance”).
[216] 15 U.S.C. §§ 1601 et seq.
[217] 15 U.S.C. §§ 1667 et seq. The Consumer Leasing Act defines a “consumer lease” as a “contract in the form of a lease or bailment for the use of personal property by a natural person for a period of time exceeding four months, and for a total contractual obligation not exceeding $50,000, primarily for personal, family, or household purposes.” 15 U.S.C. § 1667(1).
[218] 15 U.S.C. § 1665 (stating “[t]here is no liability under this chapter . . . on the part of any owner or personnel, as such, of any medium in which an advertisement appears or through which it is disseminated”).
[219] 15 U.S.C. § 1667c(b) (stating “[n]o owner or employee of any entity that serves as a medium in which an advertisement appears or through which an advertisement is disseminated, shall be liable under this section”).
[220] 15 U.S.C. § 1667c(a).
[221] Id. at (c).
[222] Id.
[223] N.C. Gen. Stat. § 66-285. This section applies only to services or repairs provided by businesses for “private passenger vehicles.” Id.
[224] Id. at (c) (referring to N.C. Gen. Stat. § 75-1.1).
[225] N.C. Gen. Stat. § 75-1.1(c).
[226] N.C. Stat. § 66-202(a).
[227] Id. at (b).
[228] Id. at (c).
[229] Id. at (d). If the advertisement references car rental rates for more than one airport location, then the advertisement must disclose the range of applicable airport charges or fees. Id.
