00-1167
Advertisement Violations
Signed 4/19/01
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
PETITIONER, )
) ORDER
Petitioner, )
) Appeal No. 00-1167
v. ) Account No. #####
)
MOTOR VEHICLE ENFORCEMENT ) Tax
Type: Advertisement
Violation
DIVISION OFTHE UTAH
STATE )
TAX COMMISSION, ) Presiding: Davis
)
Respondent. )
_____________________________________
Presiding:
G. Blaine Davis,
Administrative Law Judge
Appearances:
For Petitioner: PETITIONER REP
For Respondent: Mr. Gale Francis, Assistant Attorney
General
Ms. Julie Thomas, from
the Motor Vehicle Enforcement Division
Mr. Tom Bohling, from
the Motor Vehicle Enforcement Division
STATEMENT
OF THE CASE
This matter came before
the Utah State Tax Commission for an Initial Hearing pursuant to the provisions
of Utah Code Ann. '59-1-502.5, on February
5, 2001.
In August, 2000,
Petitioner sent out a direct-mail advertisement that contains a
"seal" which says "APPROVAL" and shows an approval number
and authorization by XXXXX. The mailed
advertisement also contains a sentence which says, "special leasing and
financing will be available for everyone."
Respondent has charged
Petitioner with advertising violations because it maintains that the
advertisement mailed by Petitioner is misleading or inaccurate under Utah Code
Ann. '41-3-210, by allegedly
violating Rule R877-23V-7(7), which provides that: "Statements representing or implying that no prospective
credit purchaser will be rejected because of inability to qualify for credit
may not be used."
Petitioner introduced a
list of 27 financing agencies with whom it periodically finances vehicles for
various purchasers, and represented that they each have different standards and
requirements for financing vehicles.
Petitioner further represented that it can in fact finance a vehicle for
everyone. They may not be able to
finance every vehicle for everyone, but they can finance some vehicle for
everyone. Although some conditions may
be imposed by the financing agency, those conditions may not relate to credit
history, but may relate to such things as the amount of the down payment.
APPLICABLE
LAW
Utah Code Ann. '41-3-210 provides, in
relevant part:
(1) The
holder of any license issued under this chapter may not:
(a) intentionally publish, display, or circulate
any advertising that is misleading or inaccurate in any material fact or that
misrepresents any of the products sold, manufactured, remanufactured, handled,
or furnished by a licensee.
Rule R877-23V-7(7), provides:
7. Finance.
The phrases, "no finance charge", "no carrying
charge", or similar expressions may not be used when there is a charge for
placing the transaction on a time payment basis. Statements representing or implying that no prospective credit
purchaser will be rejected because of inability to qualify for credit may not
be used.
DISCUSSION
In this matter, the
Respondent maintains that the advertisement which was mailed to individuals,
represents or implies that no prospective credit purchaser will be rejected
because of inability to qualify for credit.
Petitioner maintains that the advertisement is not a violation, and the statement "special leasing and
financing will be available for everyone" is not a violation of that
provision for two reasons: First,
Petitioner says it is a true statement, and that special leasing and financing
is available for everyone, and that everyone can be financed. There may be some conditions which are
required by the financing agency, such as the amount of the down payment, but
nevertheless, financing is available for everyone, and the advertisement,
therefore it is not misleading or inaccurate.
Second, Petitioner maintains that even if there is anyone that cannot
qualify for the special financing, the advertisement is clear that it is
subject to credit approval by several times stating O.A.C. (on approved credit)
and stating credit terms.
In the opinion of the
Commission, the "APPROVAL" seal, together with the statement,
"special leasing and financing will be available for everyone" do
constitute a violation of the rule because they represent or imply "that
no prospective credit purchaser will be rejected because of inability to
qualify for credit."
The defense of
Petitioner is that the statements in the advertisement are true, and therefore
they cannot be a violation.
The defense argued by
Petitioner fails for two reasons; first, the purpose of the rule is to protect
consumers from misleading advertising; and second, there is a substantial
difference between false and misleading.
The advertising at issue may not be false, but it does attempt to imply
"that no prospective credit purchaser will be rejected because of
inability to qualify for credit."
In fact, customers with an insufficient job history or down payment may
be rejected. It is therefore misleading
and violates the rule.
DECISION
AND ORDER
Based upon the
foregoing, the Commission finds that the mailed advertisement at issue violated
Utah Code Ann. '41-3-210 and Rule
R877-23V-7(7). Accordingly, the notice
of violation issued to Petitioner by Respondent is hereby sustained, and the
Petition for Redetermination is denied.
It is so ordered.
This decision does not limit
a party's right to a Formal Hearing.
However, this Decision and Order will become the Final Decision and
Order of the Commission unless any party to this case files a written request
within thirty (30) days of the date of this decision to proceed to a Formal
Hearing. Such a request shall be mailed
to the address listed below and must include the Petitioner's name, address,
and appeal number:
Utah
State Tax Commission
Appeals
Division
210
North 1950 West
Salt
Lake City, Utah 84134
Failure to request a
Formal Hearing will preclude any further appeal rights in this matter.
BY ORDER OF THE UTAH STATE TAX
COMMISSION.
DATED this 19th day of April,
2001.
Pam Hendrickson R.
Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc
B. Johnson
Commissioner Commissioner