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Nissan, FTC Settle Case Involving Allegations of False Advertising

March 10, 1994|DENISE GELLENE | TIMES STAFF WRITER

Nissan Motor Corp. U.S.A. agreed Wednesday to settle false-advertising charges involving a 1990 promotional campaign.

The Federal Trade Commission said Nissan had promised $100, "no catch," to consumers who bought a Toyota or Honda after test-driving a Nissan Stanza. The FTC said the ads falsely implied consumers could readily receive the payment.

The FTC said the offer involved significant restrictions, requiring consumers to buy the new car, take delivery of it and present the paperwork to Nissan within seven days of the test drive. Failure to disclose those conditions was deceptive, the commission said.

The settlement requires Nissan to disclose restrictions in future promotions.

Nissan said it believes the promotion was fair and accurate but that it agreed to settle the matter "in the interest of consumers." No monetary settlement is involved.

Nissan said it paid out "hundreds of thousands of dollars" as a result of the promotion. It no longer makes the Stanza.

The FTC approved the settlement 3 to 2, with Chairwoman Janet D. Steiger and Commissioner Dennis A. Yao dissenting. In a joint statement, they expressed concern that the settlement "may give implicit approval to the use of seemingly attractive promotional offers that many consumers simply cannot utilize because of limitations."

They also said the settlement could be interpreted to mean that advertisers need not disclose restrictions unless they make a "no catches" claim.

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