WASHINGTON, D.C. ─ Calling its Operation Ruse Control, the Federal Trade Commission joined 32 law enforcement agencies in announcing a nationwide and cross-board crackdown on deceptive advertising and fraud in auto sales, financing and leasing. The operation, which encompassed 252 enforcement agencies, resulted in six new FTC cases and $2.6 million in monetary judgments.

The announcement marks the second major enforcement sweep in 14 months ─ the last one netting 10 dealers for deceptive advertising in January 2014. The latest operation, which involved the United States Attorney’s Office in the Northern District of Alabama and state and local agencies in the United States and Canada, goes beyond advertising and included 187 enforcement actions in the United States and 65 in Ontario and British Columbia, Canada.

“Growing fraud and other deceptive practices in auto sales and financing are important issues affecting consumers when they are buying a vehicle,” said Joyce White Vance, United States Attorney for the Northern District of Alabama. “My office has worked closely with the FTC on this issue, and has prosecuted criminal cases at a Birmingham dealership. The Mortgage, Loan Fraud and Discrimination Working Group of the Attorney General’s Financial Fraud Enforcement Task Force also is working with other law enforcement agencies to determine what we can do now to prevent fraud during the auto lending process.”

The sweep included both civil and criminal charges of deceptive advertising, automotive loan application fraud, odometer fraud, deceptive add-on fees, and deceptive marketing of car title loans. It also marked the first time since receiving expanded authority over auto dealers under the Dodd-Frank Act that the FTC has targeted add-ons, which the agency described as a practice of a “dealer or other third party adding to the vehicle sales, lease, or finance agreement charges for other products or services.” In its press release, the FTC listed extended warranties, payment programs, guaranteed automobile protection (commonly called GAP or GAP insurance), credit life insurance, road service, theft protection, and undercoating as examples.

“For most people, buying a car is one of the largest purchases they’ll make,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Car ads must be truthful, loan terms must be clear, and dealer practices must be honest. That’s why our partners are working together to crack down on deceptive marketing about car sales, leasing and financing.”

The FTC announced that is has charged San Mateo, Calif.-based National Payment Network (NPN) with allegedly violating the FTC Act for the way it marketed its biweekly payment service online and through its network of authorized dealers. At issue was the company’s claim that its service saved consumers money, with the agency charging the payment provider with failing to disclose the significant fees it charges ─ including enrollment fees that averaged $775 on a standard five-year auto loan ─ that often cancelled out any actual savings.

Last May, the National Automobile Dealers Association warned its members in a memo that the FTC had issued civil investigative demands to dealers in connection with the sale of biweekly payment products. The association noted that the goal of the probe was unclear, but several industry insiders, speaking off the record, said the FTC was targeting NPN and its automotive operations. The FTC, however, would neither confirm nor deny the agency’s probe at the time.

In today’s announcement, the FTC announced that it also took action against Matt Blatt dealerships, which operates multiple locations in New Jersey, for violating the FTC Act by failing to disclose or adequately disclose the fees associated with NPN’s service.

The biweekly provider and Matt Blatt dealerships have agreed to settle the FTC charges, and under proposed consent orders are prohibited from misrepresenting that a payment program will save consumers money, unless the amount of savings is greater than the total amount of fees and costs charged in connection with the program. They also are prohibited from misrepresenting that the payment programs or their associated fees will improve, repair or otherwise affect a consumer’s credit record.

NPN will refund more than $1.5 million to consumers, and waive another $949,000 in fees to current customers during the fee waiver period. Matt Blatt dealerships also will pay $184,000 to the FTC as part of the settlement.

The commission voted unanimously to issue the two administrative complaints and to accept the proposed consent orders. The agreements are now subject to public comment for 30 days, beginning today and continuing through April 27, 2015, after which the commission will decide whether to make the proposed consent orders final.

The FTC also announced that three dealers ─ Cory Fairbanks Mazda of Longwood, Fla., Jim Burke Nissan of Birmingham, Ala., and Ross Nissan of El Monte, Calif. ─ have agreed to settle charges that they ran deceptive ads that violated the FTC Act, the Truth in Lending Act (TILA) and/or the Consumer Leasing Act (CLA). According to the FTC complaints, ads touted sales, lease or financing options that seemed attractive but were cancelled out by fine-print disclaimers. In other instances, the disclaimers did not disclose relevant terms, such as required down payments.

The proposed settlements in these actions prohibit the defendants from misrepresenting the purchase cost or any other material fact about the price, sale, financing or leasing of a vehicle. Jim Burke Nissan and Cory Fairbanks Mazda are also prohibited from representing that a discount, rebate, bonus, incentive or price is available unless it is available to all consumers or all qualifications and restrictions are clearly and conspicuously disclosed. The proposed orders also address the TILA and CLA violations by requiring the dealerships to clearly and conspicuously disclose terms required by these rules.

The commission voted unanimously to issue the three administrative complaints and accept the proposed consent orders. The agreements will now be subject to public comment for 30 days, beginning today and continuing through April 27, 2015, after which the commission will decide whether to make the proposed consent orders final.

Additionally, the FTC announced that, at its request, the U.S. District Court for the Southern District of Florida temporarily halted the practices of Regency Financial Services of Lake Worth, Fla., and its CEO Ivan Levy. The agency alleged that they charged consumers upfront fees to negotiate an auto loan modification on their behalf, but then often provided nothing in return.

The court also froze defendants’ assets, and last month entered a Stipulated Preliminary Injunction Order. The FTC’s lawsuit, filed on Jan. 26, 2015, is ongoing, and the commission is seeking a permanent injunction against the defendants.

According to the FTC’s complaint, the defendants violated the FTC Act and Telemarketing Sales Rule by misrepresenting that they would obtain auto loan modifications for consumers and provide full refunds if they failed to do so.

The commission voted unanimously to authorize staff to file the complaint.