The Passport group of auto dealerships and a California marketing firm have settled claims they deceptively mailed more than 21,000 fake “urgent recall” notices to consumers, the Federal Trade Commission said in a news release.
According to the agency, most of the vehicles covered by the notices did not have open recalls for defects. The bogus notices were an attempt to lure customers in for repairs and increase business for the service departments, the agency said.
According to the FTC, the vast majority of the vehicles covered by the notices did not have open recalls. The court orders settling the FTC’s charges bar all of the defendants from such deceptive conduct in the future.
“Many vehicles currently on the road are subject to open safety recalls. Legitimate recall notices sent by manufacturers and auto dealers are essential to getting those vehicles fixed quickly,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “However, deceptive fake recall notices may not only trick consumers into visiting a dealership, but also may cause them to ignore legitimate recall notices in the future, risking their safety.”
According to the FTC’s complaint, in early 2015 the defendants mailed fake recall notice postcards to nearly 7,000 Toyota owners. The complaint alleges the defendants made no effort to limit the mailing list to consumers whose vehicles were subject to open recalls. The notices warned consumers about supposedly urgent recalls, with prominent language such as “URGENT RECALL NOTICE” in large, bold-faced, uppercase letters.
In addition, the FTC said that, despite numerous complaints, the defendants sent virtually identical “urgent recall” notices to more than 14,000 Nissan owners in June 2017. The FTC alleges that, as with the Toyota notices, the defendants failed to take steps to ensure that the consumers who received the Nissan notices had vehicles with open recalls – and the vast majority did not.
The dealerships do business as Passport Toyota, Passport Nissan of Alexandria, Virginia, and Passport Nissan of Marlow Heights, Maryland.
In a statement provided to the trade publication Automotive News, Passport said it disagreed with the findings and wording in the FTC’s announcement and that “it was not our intention to mislead anyone.
“The advertisements were sent only because Passport was having serious problems identifying and fixing open recalls. This was largely because the manufacturer lists of unrepaired, open recalls were unavailable to Passport or other dealerships of those brands,” the statement said.
Passport said it agreed to the settlement to avoid the cost of extended litigation.