There are some huge risks for both side but probably more for TrueCar. The dealers are challenging the most basic premise of the TrueCar “process”. They are firing a battleship size cannon at the very bow of TrueCar. The dealers are saying, directly, if not indirectly, that TrueCar is engaged in deceptive practices in their representations to consumers, and this is causing the dealers to lose money. I hate to mention this again but the dealers have not blamed another dealer from profiting from these deceptive practices that have been implemented by TrueCar. Time to cover my A** again. I am not saying that anyone else has done anything wrong. I am just curious. Just another question.
What would happen if a jury were to determine that TrueCar was using false advertising? TrueCar would be wide open to consumer fraud suits and class actions. That would be an inevitable result. I am curious why that has already not occurred? The consumer probably has a better claim a more direct claim of a loss. If the dealer lost profit from TrueCar advertising it would have to follow that the consumers have lost money? No? I could be wrong. It could be possible that a TrueCar dealer grabbed up potential customer who had no “loss” but the plaintiff’s lost a customer and the profits from the lost transaction. This would be a transaction by transaction analysis. How about the following: A customer takes the TrueCar information and does not buy form a network dealer but now negotiates a lower deal with the non-networked dealer? Does this count even if no customer was pilfered but the profit was drained due to the sales pitch form TrueCar? What if the selling dealer made no profit on the transaction, at all or took a loss just to move a car?
We will have to take this up at the next meeting.
Specific allegations that were made when the suit was filed. Some of these claims have been thrown out by the court on a motion filed by the defendants
TRUECAR'S LITERALLY FALSE OR MISLEADING ADVERTISING CLAIMS (the numbers are paragraph numbers from the filed complaint).
A. The No-Haggle Claim (TrueCar claim the consumer does not have to haggle but they really do).
142. The No-Haggle Claim is literally false with respect to TrueCar's services. It necessarily implies that a consumer can simply print or download the Guaranteed Savings Certificate, travel to the TrueCar-affiliated dealer, and drive away with that exact make and model at the quoted price. This is false. A consumer who provides his or her contact information to TrueCar a necessary step for obtaining the Guaranteed Savings Certificate will be contacted by multiple TrueCar-affiliated dealers who will instigate negotiations or "haggling" over price.
143. In the alternative, the No-Haggle Claim is misleading because it deceives consumers into believing that TrueCar's services will provide an automobile purchasing transaction that will not involve haggling over price. They do not.
B. The Bait-and-Switch Advertising (The cars that are advertised when not available result in switching the consumers to another car).
150. Consumers who provide their contact information in response to prompts from TrueCar's website may request a "Guaranteed Savings Certificate" indicating that a particular make and model is available at a particular price. However, the TrueCar-affiliated dealers who contact the requesting consumers may not have that particular make and model in their inventory. Instead, in those instances, the TrueCar dealer receiving the referral from TrueCar will attempt to sell the consumer a different vehicle that the dealer has in stock. This constitutes false advertising through a bait-and-switch advertising campaign, wherein consumers are lured to the TrueCar dealer believing that they will be able to purchase the advertised make and model at the advertised price, when in fact, they may be offered a different make and model (hereafter, the "Bait-and-Switch Advertising").
151. TrueCar's Bait-and-Switch Advertising is literally false with respect to TrueCar's services. It necessarily implies to the consumer that he or she can simply print or download the Guaranteed Savings Certificate, travel to the TrueCar-affiliated dealer, and drive away with that exact make and model at the quoted price. This is false.
C. The Factory Invoice Claim (The use of the term factory invoice is potentially misleading).
159. TrueCar's advertising includes pricing claims relating to a "factory invoice" price for new automobiles. See Exhibit A. "Factory invoice" is literally false or misleading in this context because it purports to show the dealer's cost for the automobile (hereafter, the "Factory Invoice Claim").
160. The Factory Invoice Claim is literally false with respect to TrueCar's services. It necessarily implies that the dealer paid the "factory invoice" price to purchase the vehicle from the manufacturer. TrueCar also advertises a corresponding "TrueCar Price" that is lower than the "factory invoice" price. As a result, the consumer will believe that he or she is receiving an exceptional offer from TrueCar because he or she can purportedly purchase the automobile for less than the dealer paid by using TrueCar's services. This is false. The Factory Invoice Claim does not show the actual price that the TrueCar-affiliated dealer paid to the factory. The advertised "factory invoice" price does not include rebates, incentives, and other discounts provided by the manufacturer to the dealer.
161. In the alternative, the Factory Invoice Claim is misleading because it deceives consumers into believing that by using TrueCar's services consumers can purchase the Automobile for less than the dealer paid. They cannot.
D. The Financing Claim (Advertised financing terms are not accurate).
168. TrueCar's website advertises an "Estimated Loan Payment" for the particular make and model selected by the consumer (hereafter, the "Financing Claim"). However, the advertised financing terms are not available to all consumers. To receive financing, consumers must individually apply for and receive approval from a financing company. The final financial terms, including the monthly payment, will vary by consumer based on that consumer's credit rating and other factors. The Financing Claim appearing on TrueCar's website is literally false or misleading in this context because it purports to show the monthly payments that the consumer would pay.
169. The Financing Claim is literally false with respect to TrueCar's services .It necessarily implies that the consumer will pay the advertised monthly payment if he or she purchases that vehicle using TrueCar's services. This is false. The Financing Claim does not show the actual monthly payment that the consumer will pay for that vehicle.
E. The Transparency Claim (TrueCar is not being accurate when they say there is complete transparency because everything is not disclosed).
177. TrueCar advertises: "No Surprises. Our TrueCar Certified Dealer Network believes in transparency so you can trust that everything is upfront and out in the open. No hidden costs or surprise fees. Ever." However, TrueCar's affiliated dealers pay fees to TrueCar for customer referrals. Specifically, TrueCar charges participating dealers $299 for every new vehicle and $399 for every used vehicle sold from a TrueCar price offer or dealership introduction. These are hidden fees which are not disclosed to consumers. In addition, TrueCar's advertising fails to disclose to consumers that TrueCar will convey consumers' contact information to automobile dealers who will immediately, directly, and repeatedly solicit those consumers for business by email and telephone. TrueCar's advertising fails to disclose its true business model. Instead, it falsely advertises "No Surprises" and "transparency" (hereafter, the "Transparency Claim").
178. TrueCar's Transparency Claim advertising is literally false. It necessarily implies to the consumer that he or she is made aware of all aspects of the transaction, including costs, fees, and the nature of the purchasing process. This is false. TrueCar receives fees from TrueCar-affiliated dealers, which are factored into the consumers' alleged "Guaranteed Savings" prices, but those fees are not disclosed. Similarly, TrueCar's advertising does not disclose that consumers will be contacted by TrueCar-affiliated dealers who will immediately begin negotiations or "haggling."
F. The Rebate Claim (Rebate representations are not accurate as to when and how they are applied or when they are available).
186. TrueCar advertises "Guaranteed Savings" that include discounts based on factory incentives and rebates (hereafter, the "Rebate Claims").
187. The Rebate Claim is literally false with respect to TrueCar's services. It necessarily implies that a consumer will be able to receive the full discount advertised by TrueCar. This is false. The Rebate Claim includes multiple cumulative discounts unavailable to a particular individual consumer, including but not limited to, military service rebates, recent college graduate rebates, first-time buyer rebates, customer loyalty rebates, and others. Consequently, the Rebate Claim does not show the actual rebate is available to a particular customer.
188. In the alternative, the Rebate Claim is misleading because it deceives consumers into believing that, by using TrueCar's services, consumers will qualify for the full rebate advertised by TrueCar. They will not.