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Impressions From Detroit

Thanks in part to recycled anecdotes from consumer advocates, the industry fared better than expected at the FTC’s first roundtable discussion.

by Tom Hudson
May 1, 2011
4 min to read


The Federal Trade Commission’s first “Roundtable” was held on April 12 at Wayne State University Law School in Detroit. The FTC billed it as a “listening tour.”

The event was well attended, as these things go. I’d guess there were 100 people in the audience, which included dealers, finance company representatives, class action lawyers, consumer advocates, academics, state and federal regulators and lawyers like me.

In order to “listen,” the FTC divided the day into discussions by six panels, each addressing a different subject. You can check the online version of my column at www.fi-magazine.com for a complete listing of panels and panelists.

Overall, I’d say that the FTC representatives who served as moderators seemed to be neutral on the issues the panels addressed. That was a welcome development since the questions the FTC had published in the Federal Register in advance of the event had seemed, at least in some instances, to be hostile toward the industry. The state regulators also were neutral, for the most part. Easily the most effective presenter of the day was the National Automobile Dealers Association’s Andy Koblenz, who made a very cogent argument in support of the current system of dealer participation.

The FTC’s Joel Winston set the tone for the day by stating that the FTC wasn’t interested in anecdotes, but was instead looking for data — real-life facts, he said. That statement set a high bar for consumer advocates, who didn’t show particularly well. They kept trotting out their years- and decades-old anecdotes about dealers and finance companies abusing widows and orphans, and drowning kittens, while industry participants kept pointing out that anecdotes weren’t favored. And when consumer advocates were asked about how frequently such abuses occur in the marketplace, they always seemed to come up empty-handed.

One National Consumer Law Center representative tried to point to a recently issued “survey” by the NCLC (the release of the survey was conveniently timed just before the meeting) that purported to show that dealer abuses were rampant in all states. But since the “survey” was nothing but a compilation of answers to a short questionnaire by 48 lawyers who handle auto cases for consumers, no one seemed to pay it much mind. It certainly wasn’t something that would be seen as either impartial research or scholarship, if you catch my drift.

The consumer advocates staked out the most radical consumer-protection positions, arguing for an end to — or serious limits on — common dealer practices such as dealer participation and spot delivery. In support of their positions, the consumer advocates kept coming back to their stories about dealer misdeeds, only to be countered in nearly every instance by the industry representatives. They pointed out that the dealer actions detailed in the consumer advocates’ anecdotes were already illegal under either state or federal law, and that there was no need for further regulation. At one point, I turned to the person next to me in the audience and whispered that if discussions about practices already banned by federal and state laws had been prohibited, the entire roundtable would have taken about 15 minutes.

The conflicting agendas of consumer advocates and industry representatives produced sparks on the topics of dealer participation, spot deliveries, the sale of ancillary products and credit discrimination. Other panels were much more sedate, with the surprise of the day being the panel that discussed GPS and starter-interrupt devices. Panel participants seemed to be in general agreement that the use of the devices was OK, but that perhaps there were some privacy issues regarding the safekeeping of location data.

The industry did do better than consumer advocates. In fairness, industry participants were not very long on data themselves, but the tone of the day seemed to be that the burden of proof was on those asserting bad acts, and not on the industry to show that it behaved well.

If you missed watching the Roundtable (it was streaming live), the video and a transcript will be available shortly on the FTC’s Website. OK, Law & Order it’s not, but if you are in the car sale, finance or lease business, you need to see it.

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