TN Attorney General Bob Cooper Stops Misleading Auto Ads

By John Disque

On March 24, 2011 Tennessee joined eight other states in a settlement with a Georgia advertising firm over allegations of misleading car sales promotions around the nation.

Action Integrated Marketing of Atlanta creates advertising campaigns for automotive dealers and furniture retailers. Their website states "No one knows more about how people make critical decisions like the purchase of these high ticket items– or how to influence them – than we do. We communicate... motivate... and inspire."

A Georgia auto dealer was running Action Integrated ads to lure Tennesseans and people from 8 other states to their car lot in Norcross, Georgia. The ads bragged of special deals on government vehicles and repos. Over the years it's been a proven marketing strategy in the used car industry.

The ads usually hand the public a sense of urgency as the dealer claims to have a limited stock. This strategy accomplishes three main objectives: buyers come quickly, they don't bother to research the history of the cars, and they come from many miles away.

Normally, everything would be fine and legal. The only problem is: in this particular case, it was downright lies and the cars were proven to be from the dealer's standard inventory.

These ads also failed to disclose that the car's price is contingent on the buyer's ability and willingness to obtain financing. "In Tennessee, our laws prohibit companies from misleading the public through such tactics," Attorney General Cooper said.

Named in the lawsuit and agreement were Action Integrated Marketing and its CEO, Jay D. Murphree, based in Norcross, Ga. As a result, the company has agreed to stop running misleading ads and to properly disclose prices and terms of vehicle sales in future ads. In addition, Action Integrated Marketing and Murphree have agreed to pay $150,000 to the states. Tennessee's share is $13,000.

A civil penalty of $130,000 is suspended provided the defendants comply with the agreement. Other states participating in the settlement include Georgia, Idaho, Illinois, Kentucky, North Carolina, Ohio, Oregon, and Pennsylvania.

Published March 30, 2011

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