Consumer News Release
For immediate release -- Thursday, September 30, 1999.
Contact: Bill Brauch, Consumer Protection Division, 515-281-5926
Mazda to Change Auto Lease Advertising and Pay Iowa $50,000
Attorney General Tom Miller announced today that Mazda Motor of America Inc. has agreed to change its national ads for auto lease vehicles and to pay $50,000 to Iowa as part of the settlement.
Mazda is paying a total of $1.2 million to 24 states that cooperated in the action with the Federal Trade Commission.
The states alleged that Mazda violated a 1996 court order which required Mazda to clearly disclose key lease terms in its advertising such as total up-front costs and the number, amount and timing of scheduled payments. The 1996 order settled false-advertising suits filed earlier by many of the states.
Despite the earlier agreement, Mazda ads continued to highlight low monthly payments while obscuring the total amount due at lease-signing, according to the states.
"The 1996 order required Mazda to clearly disclose certain terms about auto leases," Miller said. "We alleged that Mazda violated the order by advertising certain terms but failing to make full disclosure."
The states alleged that Mazda lease ads failed to show the total amount of payment due at lease signing for a sufficient time to be noticed and understood by consumers. Because of distracting sounds, small type size and other clutter, the ads failed to conform to disclosures required by the 1996 settlement and court order, the states alleged.
Miller said the Federal Trade Commission worked directly with the states to obtain the settlement. The FTC announced a similar settlement with Mazda.
"We were very pleased to be partners with the FTC," Miller said. "The joint effort was instrumental in achieving this good result."
The settlement announced today requires Mazda to make payments to the states and abide by the permanent injunction included in the 1996 Iowa court order, and it prohibits Mazda from misrepresenting the amount of up-front lease costs.
The twenty-four states involved in the settlement are: AL, AZ, CA, CT, FL, HA, ID, IL, IA, KS, MD, MA, MN, MO, NE, NV, NJ, NY, NC, OH, PA, TN, WA, and WI.
Auto leasing tips for consumers:
Miller said more and more new-car consumers are leasing autos. "Consumers need to know what they are getting into," Miller said. He listed several tips for consumer considering an auto lease agreement:
Consider all the costs of leasing before signing a lease agreement. Most leases have mileage limits and impose substantial penalties for exceeding those limits. Other costs not imposed in auto purchases but imposed in leases may include "acquisition fees," lease-end "disposition fees," and charges for excessive use.
Never go into a dealership intending to purchase and come out having signed a lease. Always ask for written materials to take home and review before agreeing to lease.
Remember that lease terms may be negotiable. Don't think the dealer can't offer a lower monthly payment.
If you intend to operate the vehicle for five years or more, leasing is seldom a good deal.
Don't sign a lease agreement unless you are sure you want to lease. Most leases include large penalties for ending the lease early.
Miller said that consumers with complaints about auto leases or lease advertising should contact the Attorney General's Consumer Protection Division, Hoover Building, Des Moines, Iowa 50319. Phone 515-281-5926. E-Mail: firstname.lastname@example.org. Web site: http://www.state.ia.us/government/ag.
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