Michelle Singletary
Michelle Singletary
Columnist

Auto dealers’ deceptive ads

Say it ain’t so.

An auto dealer advertises one price for a car, but when the customer shows up at the lot the deal isn’t as sweet as marketed. No, that never happens, she says, her words dripping with sarcasm.

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Well, the Federal Trade Commission says it caught two auto dealers falsely advertising the cost or the available discounts for some vehicles.

Two dealers, one from Maryland and another from Ohio, agreed to settle the FTC charges that they advertised discounts and prices that were not available to a typical consumer. The FTC charged Timonium Chrysler, Inc. of Cockeysville Md., and Ganley Ford West Inc. in Cleveland for misrepresenting vehicle discounts.

The FTC said the Maryland dealer’s Web site touted specific “dealer discounts” and “internet prices,” but allegedly failed to disclose adequately that consumers would need to qualify for a series of smaller rebates not generally available to them. And even if they did qualify for the rebates, the cost of the vehicle was still more than the advertised price.

In the case of the Ohio dealer, the FTC said its advertising on its Web site and in local papers failed to disclose that the promised discount was for pricier versions of the vehicles advertised.

Under the settlements, the dealers cannot advertise prices or discounts unless accompanied by clear disclosures of any required qualifications or restrictions

“We want to apologize to any Ganley Ford West customers who felt they had been mislead by the ads,” Steve Dever, attorney for Ganley Ford West told the (Cleveland) Plain Dealer. “We have upgraded the entire process and procedures to make sure the ads are compliant with all state and federal laws.”

Andy White, vice president and owner of the Cockeysville dealership, offered a different perspective, telling the Baltimore Sun, “We don’t agree with the allegations they’re making.” White said the dealer will comply with the FTC settlement calling for more transparency.

“Buying a car is a huge financial commitment, and people often calculate what they can pay down to the penny,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “They should be able to depend on the dealers to provide truthful information, and they can depend on the FTC to enforce consumer protection laws on the lot.”

Yes, there are plenty of car dealers who are straight with their customers. But this settlement is a reminder that buyer beware is still good advice.

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Where’s My Rent, Son?

Here’s a heads-up for those living with their parents: If you want to buy a home but haven’t been paying rent you may find it hard to get a mortgage loan.

Starting next year, many homebuyers will have to show 12 to 24 months’ proof of a housing payment history, which would include paying rent to your parents if you live with them, writes Jon Coile in The Washington Post’s Where We Live blog. The new rule is part of the Consumer Financial Protection Bureau’s Ability to Repay and Qualified Mortgage rule that goed into effect Jan. 10.

The change is the federal government’s effort to stop a creditor from making a higher-priced mortgage loan without regard to the borrower’s ability to repay the loan.

“Parents must act like real landlords and require formal and consistent payments from their tenants,” Jon Coile writes.

Only about 48 percent of adult children living with their parents say they pay rent, and often when they do, the payments are sporadic and lower than an average mortgage payment, Coile reports.

Here are a few tips from Coile to help you get a loan:

-- To create a verifiable “rental history,” you’ll have to actually write a check that is deposited into your parent’s or parents’ bank account each month. “Same amount, same day of the month. Don’t cut any slack near the holidays and let the boomeranger skip a monthly payment, because it will come back to bite them in the long run.”

-- It is also helpful if the amount of money the young adults pay their parents is in line with what they expect their mortgage payment to be in the future.

Color of Money Question of the Week

What do you think of the new mortgage rule? Send your responses to colorofmoney@washpost.com. Put “Rental History, Please” in the subject line, and include your full name, city and state.

Where’s My Home?

In a three-part series, “Homes for the Taking,” The Washington Post investigated tax lien practices in the District of Columbia that unfairly forced people to lose their homes. Property owners in the District lost their homes over relatively small amounts in unpaid property taxes that had been bought up by predatory investors.

“For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid,” reported Michael Sallah, Debbie Cenziper and Steven Rich.

Here’s a snippet from part one: “Foreclosures have upended families in some of the city’s most distressed neighborhoods. Houses were taken from a housekeeper, a department store clerk, a seamstress and even the estates of dead people. The hardest hit: elderly homeowners, who were often sick or dying when tax lien purchasers seized their houses.”

This is an amazing series you should read.

Part One: Left without nothing

Part Two: Outsiders come to buy liens

Part There: Long battles over bills

Profiting From a Positive Pregnancy Test

On Craigslist and eBay, people can find pregnancy tests showing positive results for sale for $20 to $40.

Reporting on the ads, the Daily Dot found this on Craigslist: “Wanna get your boyfriend to finally pop the question? Play a trick on mom, dad or one of your friends? I really don’t care what you use it for.” This person was selling positive sticks for $25 each.

For last week’s Color of Money Question, I asked: “What do I think of the online market for positive pregnancy (real and fake)?”

“One word: Despicable,” wrote Denise Baikie of Chicago.

“Rather than cast aspersions on the sellers of these tests, I believe the criticism should be directed at the buyers, who we can safely assume to be overwhelmingly female,” wrote Thomas J. Druitt of Paducah, Ky.

Roger Lyons from Indianapolis wrote on Facebook, “People during hard times continue to find a market niche who can relate to their economic opportunity.”

And Angela White of Washington, D.C., added on Facebook, “It’s the American way.”

Tia Lewis contributed to this report.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C., 20071, or michelle.singletary@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to www.postbusiness.com.

 
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