Auto Dealers: Dead Rule, Rising Risk — State Attorneys General Are Stepping up Fast (MUST READ)

Every so often I'll read something and think "I wish I wrote that".  This happened just the other day when our friends Ace Christian and the SecureClose Team shared this write up with me on the state of regulation in our industry.  Ace and I recently shared the stage at Compliance Unleashed and discussed this subject as it pertains to certain Cars Rule concepts, and when I asked if we can re-publish this as this week's Tip of the Week, they were gracious enough to  agree:

As we reflect on Compliance Unleashed 2025 at BHPH United, one session continues to echo louder with each passing week: the conversation between Steve Levine and Shaun Petersen during the general session.

Steve Levine warned, “Just because the CARS Rule was vacated doesn’t mean the risk disappeared.”

And he was right...

While we sat in that room, unaware, the ripple effect had already begun. Within weeks, states began announcing new legislative changes and filing lawsuits — confirming the prediction that state attorneys general would fill the enforcement vacuum left by the 5th Circuit’s decision to strike down the FTC’s CARS Rule.

We already knew California’s SB 766 was in motion. What we didn’t know is how quickly that bill would advance — and today, it looks almost certain to pass.

But California isn’t alone. Since Q4 2024, we’ve tracked the following states taking legislative or enforcement action to implement their own “mini-CARS rules” or crack down on non-compliant auto retail practices:

🔹 Massachusetts – Enacted sweeping new pricing transparency rules in March 2025

🔹 California– Filed SB766 that reflects the FTC CARS Rule that was vacated Jan 2025

🔹 Ohio – Filed lawsuits against 6 dealerships in April 2025 for deceptive practices

🔹 New York – Introduced a broad consumer protection bill expanding unfair and abusive acts March 2025

🔹 Pennsylvania – Expanded disclosure rules and defined online ads as binding

🔹 Rhode Island – Settled with 6 dealers for illegal add-on charges

🔹 Illinois – Secured a $20 million settlement over bait-and-switch pricing

🔹 Arizona – Worked with the FTC on a $2.6 million settlement for junk fees targeting Latinx consumers

🔹 Connecticut – Secured a $1.5 million settlement with Carvana

And the rumors? Turns out, they weren’t just rumors — many former federal enforcement officials are now staffing state AG offices, picking up where the FTC left off.

As Steve and Shaun said: Be careful what you wish for.

At SecureClose, we monitor this closely — not to fearmonger, but because we’ve seen what happens when a dealer who said they “didn’t need it” ends up in the headlines. It’s rarely about bad people — it’s about unrealistic expectations in a regulatory environment that changes by the month.

That’s why we continue to lead the way in automating disclosure,

e-sign compliance, and closing integrity. Our new SecureClose V3 doesn’t just collect signatures — it delivers proof. It ensures no one can say they weren’t told, misled, or uninformed. We’ve built a system that protects both the dealer and the consumer, and we’re proud to work with leaders like Steve Levine to keep pushing the bar higher.

We don’t just say “compliance matters.”

We build the tech to prove it — every time.

#BHPH #ComplianceUnleashed #SecureClose #AutoIndustry #ConsumerProtection #CARSRule #StateAGs #DealerCompliance #Econtracting

Research Q4 2024 to Q2 2025

States that have introduced or enacted legislation similar to California's SB 766, the Combating Auto Retail Scams (CARS) Act, aiming to enhance consumer protections in auto sales and leasing. These efforts often mirror or expand upon the now-vacated Federal Trade Commission's (FTC) CARS Rule.

Massachusetts

In March 2025, Massachusetts implemented regulations targeting unfair pricing practices in auto sales. Key aspects include: Mayer Brown

Total Price Disclosure: Sellers must disclose the "total price" of a product, encompassing all fees, charges, or other expenses, including any mandatory ancillary products offered as part of the same transaction. Mayer Brown

Enforcement Measures: Non-compliance is treated as a per se unfair or deceptive act, enabling enforcement actions with treble damages and attorneys’ fees.complyauto.com

These measures are designed to enhance transparency and protect consumers from hidden fees and misleading pricing.

Ohio

In April 2025, Ohio authorities took action against six car dealerships accused of deceptive practices, including using fake buyer names and failing to deliver vehicle titles. The dealerships violated the Consumer Sales Practices Act and the Certificate of Motor Vehicle Title Act. As a result, over $300,000 will be awarded to affected car buyers from the Title Defect Recission Fund, which assists consumers who do not receive a title within 40 days of purchase. The US Sun

Here's which dealerships are being sued:

Butler County: Sirius Motors

Fairfield County: Highway 22 Auto Sales

Fayette County: Robinson Auto

Licking County: Ohio Luxury Imports

Stark County: Automax Of Canton

Wood County: Prestige Family Cars

New York

In March 2025, New York officials announced proposed legislation titled the "Fostering Affordability and Integrity through Reasonable Business Practices" act. This legislation aims to strengthen consumer protection laws by:Times Union

Expanding Prohibited Practices: Including unfair and abusive acts, not just deceptive ones.

Targeting Specific Issues: Addressing practices such as AI-related scams, difficult-to-cancel subscriptions, junk fees, and unfair billing by health care and lending companies.

The bill seeks to provide broader protections for consumers, especially in light of reduced federal enforcement capacity.

Pennsylvania

In August 2024, Pennsylvania amended its Automotive Industry Trade Practices regulations to bolster consumer protections.

Key provisions include: Post CARS Rule NOT SO FAST

Expanded Definition of Advertisement: The term now encompasses online statements and representations.

Mandatory Vehicle Inspections: Dealers must inspect vehicles within 30 days of arrival for specific unsafe conditions.

Disclosure Requirements: Dealers are obligated to disclose in writing any known dangerous issues, such as flood damage or structural problems, even if the vehicle is sold "as is."

These changes aim to eliminate dishonest sales tactics and provide transparency, potentially saving buyers thousands of dollars in repairs.

Rhode Island

In late 2024, Rhode Island's Attorney General reached a settlement with six auto dealerships accused of automatically charging for add-on warranties not included in vehicles' advertised prices. The settlement included over $1 million in restitution for affected consumers.

Illinois

In December 2024, Illinois Attorney General Kwame Raoul announced a $20 million settlement with a chain of dealerships that engaged in bait-and-switch marketing tactics. The dealerships were accused of advertising vehicles at low prices and then charging higher prices upon sale. Auto Dealers: Buckle-Up Enhanced State-Level Enforcement Ahead

Arizona

In 2024, Arizona Attorney General Kris Mayes, in collaboration with the FTC, secured a $2.6 million settlement from an Arizona dealership that allegedly charged customers unwanted add-ons and other junk fees, particularly targeting Latinx consumers.

Connecticut

In early 2025, Connecticut Attorney General William Tong announced a $1.5 million settlement with Carvana, establishing a $1 million restitution fund for consumers who did not receive valid title and registration documents at the time of sale.

Conclusion:

We realize that this is a bit more information that our usual Tip of the Week, but we think it's important that our clients and friends understand the realities of the regulatory landscape. Don't be fooled into a false sense of security by federal deregulation. The most likely point of attack comes from your local attorneys and regulators, and as this great summary shows, they are open for business. As always, reach out to info@IGNITECP.com if you have any questions.