On August 19, 2026, the Federal Trade Commission (FTC) and the State of Connecticut announced a settlement to resolve allegations that a dealership misled consumers by charging customers for “certified pre-owned” vehicles and collecting other fees without authorization.

The FTC filed the case in 2024 - before the March 2026 warning letters sent to dealers. The case was filed against the dealership and its leadership, including the principals, the general manager, the finance manager, and sales managers.

The dealership neither admitted nor denied the allegations but agreed to pay $4 million for consumer redress.

The FTC and the Connecticut Attorney General alleged that the dealership required customers to pay to “certify” used cars that the dealership had advertised as “certified pre-owned.” They further alleged that other charges, such as total loss protection, were inserted into financing agreements without the customers’ consent.

The settlement requires the dealership to advertise the total price of a vehicle clearly and conspicuously as the most prominently displayed price in any disclosure.

The total price of a vehicle is the maximum total price including all mandatory fees or charges a consumer must pay for a vehicle, except government charges.

The settlement also requires the dealership to obtain express, informed consent before charging a consumer for any add-on product or service.

FTC Warning Letters Sent in March 2026

In March, the FTC sent 97 letters to dealerships warning of potentially illegal advertising practices. The FTC stated that “the agency is dedicated to ensuring that consumers only pay the advertised price for products and services, and are not subject to undisclosed fees, hidden charges or other illegal conduct.”

Dealers can view the FTC warning letter online at https://www.ftc.gov/system/files/ftc_gov/pdf/AutoWarningLetter.pdf

In the letters, the FTC cites examples of illegal pricing, including advertising a price that does not reflect all required fees. The FTC later clarified: 

• The most prominent price in all ads must be the all-in price (everything except for government fees). This must be the out-the-door price at which any consumer can purchase the vehicle;

• Documentary Fees must be included in the “all-in” price – regardless of conflicts with a state law (the FTC is not regulating the amount of the doc fee).

The FTC further clarified that their authority to regulate dealer advertising as unfair or deceptive acts or practices is authorized under Section 5 of the FTC Act.

Section 5 of the FTC Act prohibits advertisements that materially mislead consumers or fail to clearly and conspicuously disclose material terms and applies broadly to all industries.