Herb Gordon Settles with FTC over Terms of Ads

Article excerpt

Alan Kline


Facing penalties of up to $11,000 a day, Herb Gordon Auto World of Silver Spring has signed an agreement with the Federal Trade Commission, promising not to mislead consumers in its newspaper advertisements.

The company, which sells cars made by Dodge, Mercedes-Benz, Nissan, Oldsmobile and Volvo, was cited by the FTC in 1995 for violating the federal Truth in Lending Act by burying the actual terms of lease and financing deals in the fine print of newspaper ads.

"These ads very seriously misrepresented the true costs and terms of automobile deals," said Carole Reynolds, a senior lawyer for the FTC, adding that the agency cracked down on Herb Gordon after receiving several complaints from consumers about the company's advertising practices.

Under terms of the agreement, signed with the FTC in October and released yesterday, Herb Gordon must comply with federal laws requiring accurate disclosure of sales and lease terms or risk paying fines of up to $11,000 per ad per day, Ms. Reynolds said.

Herb Gordon President Tom Gordon admitted no wrongdoing but said the dealership has not advertised any leasing programs in newspapers since he signed the consent agreement. …