10 February 2016
The supervisory campaign conducted by the Consumer Ombudsman and the state regional administrative authorities showed that car advertisements do not always provide clear information about the total price of vehicles or about their financing. Many advertisements also fail to indicate the precise annual interest for credit financing of car purchases.
The aim of the supervisory campaign was to build an overall picture of the kind of pricing information and financing options that printed media and car dealers use to advertise motor vehicles. During the campaign, a total of 5,300 car advertisements were assessed and 337 car dealers were inspected in the summer of 2015.
Improvements were seen in printed media-based advertisements of car credit in comparison with previous supervisory campaigns. The car and its presentation now correctly constituted the main message for consumers in advertisements. Previously, the focus had often been on financing instead of the car. Isolated credit information, such as the interest rate, is now very rarely used as an incentive in advertising.
Inadequate and unclear information
According to the Consumer Protection Act, advertisements must indicate the total cost of a vehicle in the price and, with respect to financing, other information relating to credit must be provided in addition to the actual annual interest rate. The campaign revealed that the final total price, including delivery costs, was not always advertised in printed media or by car dealers.
Illustrative financing clauses in printed media were not provided in an easily understandable form and the information was often inadequate. If an advertisement provides even one figure indicative of the terms of credit, e.g. the amount of a monthly instalment payment, all other information required by law must be provided in the same connection. Such requisite information includes, e.g. the nominal interest rate, other credit costs and the effective annual interest charges. Advertisements nevertheless fail to indicate the actual annual interest for credit financing of car purchases. The actual annual interest is important information for consumers, as it enables them to compare financing options. Financing offers were not displayed to any extent by car dealers.
As part of the campaign, the Consumer Ombudsman also checked the declared fuel consumption and carbon dioxide emissions in respect of new cars. The aim of the obligation to provide information is to influence consumer choices in such a way that they favour cars that consume less fuel and cause fewer carbon dioxide emissions. Car advertisements provided this information fairly well. Some advertisements, however, did not provide this information at all, or it was presented in a small font, making the text hard to read.
In conjunction with the campaign, the Consumer Ombudsman also intervened in television advertisements for car credit that did not adequately indicate the terms of credit agreements. For example, the mention of interest-free terms in advertising requires that other information relating to the credit agreement must also be presented in a clear manner. The Consumer Ombudsman points out that both financers and retailers are responsible for the accuracy of advertising.
The Consumer Ombudsman discussed the results of the supervisory campaign with the Association of Automobile Importers in Finland and the Finnish Central Organisation for Motor Trades and Repairs. The supervisory campaign will be repeated during 2016.