When it comes to trade practices, minor or seemingly innocent mistakes can have catastrophic ramifications.  As a dealer, this is one area you will want to be well versed in to ensure that your business is protected!

Having a dealership in Florida means that you will be subjectedto the FDUTPA (Florida Deceptive and Unfair Trade Practices Act) that was created to protect consumers from being taken advantage of.  So, what does this mean for you?  It means you should do some housekeeping within your business to ensure you are using the right forms, training your staff to check all the boxes regarding the proper way to take a customer through the sale process from start to finish, and abiding by the rules set forth in 501.975.

You might be asking yourself, what exactly is deemed deceptive or unfair?  First, let us be guided by our moral compass.   Things like misrepresenting the actual condition of the vehicle, warranty information or incorrect advertised prices are easily identified as deceptive.  Put yourself in the customer’s shoes.  You walk into a dealership and the salesman tells you he has this perfect, mint condition, absolute gem that you are going to love!  How would you feel if you, based on the salesman’s pitch, purchased that car only to find out it was once floating down the road after hurricane Ian and sustained an incredible amount of water damage?  That is a pretty drastic example, so let’s imagine that you find a great deal on a used vehicle, but seeing how it’s used, you are a little skeptical about potential future problems.  You’re told by the salesman, “Don’t worry, our team of experts have checked this beauty from top to bottom!  The prior owners were meticulous with maintenance.  If anything happens, just bring it back in and the warranty will cover it.”  What if the warranty, in fact, does not cover it?  What if the maintenance history of the vehicle was actually unknown? Can you see where the waters can become muddied from something as simple as a general claim?  What you might think of as Puffery, or simple selling statements can appear deceptive.  In fact, you do not even have to break a law to be found in violation of FDUPTA.  Minor errors when it comes to using the proper disclosures, even down to incorrect font size, can have an impact when it comes to FDUTPA.

This is one area that you will want to do your due diligence in.  That means taking the time to learn the laws, stay on top of your compliance, and even evaluate your staff.  Everyone wants their business to succeed, just make sure it doesn’t come in the form of cutting corners.  If one of your salesmen fails to disclose something he needs to, or misrepresents something just to make a sale, the responsibility falls back on you and your business. Consumer attorneys love FDUPTA because it tends to be a catch all, and allows them to seek their attorneys fees from you.  We have seen some attorneys win as little as $1200.00 for a customer and go on to seek $600,000.00 or more for their legal fees.   There are even more protections for those over the age of 60 and military personnel (including their families) have special protections under this act.

One thing you can do to protect yourself is to have your customers sign a disclosure under Statute 501.98.  When the customer signs this, they must first come to you with a written demand and are limited to the lesser of $500 or 10% of the claim in legal fees. This can stop a claim before it blows up.  This is a form that you would have in your deal jackets every time.  If you would like help drafting this form, we are happy to help just email us at info@autolegalgroup.com

Click here to learn more about Chapter 501 Deceptive and Unfair Trade Practices.