BILL NUMBER:S5488

TITLE OF BILL:  An act to amend the executive law, in relation to
motor vehicle dealer advertising

PURPOSE:  This bill enables the Department of State Consumer
Protection Division, in consultation with the Department of Financial
Services to promulgate regulations relating to advertising and
marketing by motor vehicle dealers. This bill also gives jurisdiction
to the Department of Law to enforce these regulations. It also bans
advertisements that represent that Social Security Disability (SSD)
and Supplemental Security Income (SSI) are adequate sources of income
for auto loans.

SUMMARY OF PROVISIONS:

Section 1: Amends the executive law to add a new section 94-c which
provides (1) the Consumer Protection Division is authorized, in
consultation with the Department of Law and the Department of
Financial Services, to promulgate regulations relating to advertising
and marketing by auto dealers, (2) such regulations shall prohibit any
auto dealer from making representations that SSI and SSD are sole
adequate sources of income for an auto loan, (3) the Department of Law
shall have jurisdiction to enforce these regulations, issue
injunctions, and assess civil penalties, and (4) the Consumer
Protection Division is authorized to establish fines not to exceed ten
              

thousand dollars for any violation of these regulations.

Section 2: This act shall take effect on the one hundred eightieth day
after it shall have become law.

EXISTING LAW:  Under current law, auto dealer advertising is not
regulated by statute, and no entity is granted explicit authority to
promulgate regulations regarding auto dealer advertising.

JUSTIFICATION:  Auto dealership advertisements are sometimes
dishonest, misleading, flatly fraudulent, and often times target the
most vulnerable sectors of the population, such as those who have few
resources, poor credit, are elderly, or rely on public benefits as a
sole source of income.  Dealership advertising must be better
regulated to ensure that fraudulent claims, bait-and-switch tactics,
and predatory advertising are eliminated.

Currently, auto dealer internet advertisements from dealerships
located in New York contain particularly egregious representations.
These advertisements target vulnerable populations, sometimes those
whose sole sources of income are SSI and SSD, and often explicitly
focus on those who have bad credit or no credit, while simultaneously
making claims of guaranteed 100% credit approval regardless of the
consumer's credit score. Consumers are bombarded with false promises
and misleading information.

The Department of State Consumer Protection Division, Department of
Law, and the Department of Financial Services possess unique knowledge
of the issues that are at play in dealership advertisements. Granting
these entities regulatory authority over auto dealer advertisements
will allow unambiguous rules for advertisements to be properly


promulgated and enforced to protect innocent consumers who are in the
market for a reliable, affordable vehicle.

LEGISLATIVE HISTORY:  This is a new bill.

FISCAL IMPLICATIONS:  None.

LOCAL FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:  This act shall take effect on the one hundred
eightieth day after it shall have become law.