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MRAA Flags FTC Regulations

The Federal Trade Commission recently proposed extensive new regulations that would negatively impact every marine dealer in America, and there’s need for broad marine industry action — now.

This proposed rule, according to MRAA government relations manager Chad Tokowicz, “would make major changes to dealership operations, impacting sales, financing and leasing. The definition of ‘motor vehicles’ used by FTC is broad and includes marine dealers.”

Specifically, the proposal states: (j) “Motor Vehicle” means (1) any self-propelled vehicle designed for transporting persons or property on a street, highway, or other road; (2) recreational boats and marine equipment.

The MRAA took early action following release of the proposal, formally urging FTC to grant extended time to consider revisions to its proposal. Shockingly, the request was denied without justification. So, a call for more involvement from the marine industry is sorely needed.

Tokowicz further explains: “After the Commission reviews the comments received, it will decide whether to proceed with issuance of a final rule. Our objective is to show the proposals, when applied to our marine businesses, are simply unjustified and would constitute serious government overreach. In addition, proposed new document retention regulations would be excessive. Even the National Automobile Dealers Association calls the proposal extreme.”

Here are a few examples of what could be required if the proposed regulations are adopted. Remember, “vehicle” includes boats.

Out-the-door pricing: Dealerships would be required to produce a true offering price for any specific vehicle it promotes. This is effectively an out-the-door price the dealer would charge, not including government fees. Moreover, dealers would be required to provide this pricing to any prospective buyer inquiring, including at the first point of contact.

Add-on disclosure: The FTC considers any equipment or services not originally included with a vehicle by the OEM a “junk fee.” In fact, some of the questions where the FTC is seeking comment consider whether any final rule should restrict dealers from selling add-ons — other than those already installed on the vehicle — in the same transaction or on the same day the vehicle is sold or leased.

Accordingly, a marine dealer would be required to produce a list of “add-ons” to be digitally available to the public on its website or app and would require very specific listings. Further, the FTC proposes that add-ons must provide a benefit to consumers. It appears that the FTC would be the sole authority in deciding which products or services are beneficial to consumers.

Record keeping: The proposed rule would require dealers for at least two years to maintain detailed records on almost all aspects of their trade practices including, but not limited to, the following: advertisements, marketing materials relating to price, financing, or lease terms; sales and add-on products and services offered; consumer transactions including purchase orders; financing and leasing agreements; written consumer complaints and inquiries relating to vehicles and/or products; records that demonstrate compliance with add-on sales requirements; and more.

MRAA has put out an industry-wide call to action now while comments are being received at FTC.

“While the MRAA supports efforts to protect consumers from unfair and deceptive practices, it is our belief that these onerous regulations would have significant negative implications for marine dealerships,” says Tokowicz. “To our knowledge, there have been no issues with marine dealer practices and the small businesses that make up our industry’s retail operations are being unfairly caught up in the wake of these overreaching regulations. We must act now to demonstrate a strong objection to any of these proposed and unnecessary regulations on the marine industry.”

The MRAA has made it fast and convenient for dealers to act and voice their opinion on this matter by using the link to Boating United, our industry’s advocacy platform. The deadline for FTC to accept comments is less than one week away — Monday, Sept. 12, 2022.

Visit Boating United and follow the easy instructions to make your voice heard. But do it now!

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