Or. Admin. R. 137-020-0020
(2) Definitions: For purposes of this rule, the following definitions shall apply:
(j) "Clear and conspicuous," including the terms "clearly" and "conspicuously," means that a message, statement, information, representation or term is conveyed in a manner that is readily noticeable, will be easily understood by the average person, and is in a meaningful sequence. In order for a message to be considered "clear and conspicuous," it shall, at a minimum:
(D) In the case of radio advertising:
(E) In the case of television advertising:
(iv) Have as a minimum height for required superimposed written copy ("super") in a television advertisement or advertisements in any other audio-visual medium:
(F) In the case of printed advertising:
(G) In the case of internet advertising:
(iii) When using hyperlinks to lead to information required to be disclosed by law:
(ix) Use clear language and syntax in such a manner that an ordinary consumer can understand the information required to be disclosed by law.
OFFICIAL COMMENTARY: Each advertisement shall be evaluated for its overall impression. The public should not have to weigh each word, hunt for the hidden meaning of each statement, or search for inconspicuous disclaimers. Advertisements which place material disclosures in small print, or inconspicuously bury material at the bottom of the advertisement are not clear and conspicuous. If on the other hand, the information does not materially change, limit or alter the offer being made, it can be placed at the bottom of an advertisement.
15 USC sec. 1667c(c) allows certain required lease disclosures to be given to a consumer in a radio advertisement by referring the audience to either a toll free telephone number or a written advertisement that appears in a publication in general circulation in the community served by the radio station on which such advertisement is broadcast. All lease advertisements on the radio must include the following disclosures to comply with Oregon and Federal law: that the transaction advertised is a lease; the total amount of any initial payments required on or before consummation of the lease or delivery of the property, whichever is later; the number, amounts, due dates or periods of scheduled payments, and the total of such payments under the lease; and the capitalized cost.
(k) "Dealer" means a person who buys, sells, trades or exchanges, leases, displays or offers to buy, sell, trade or exchange motor vehicles either outright or by means of any conditional sale, bailment, lease, security interest, consignment or otherwise or who is a broker. "Dealer" does not include any person excluded by ORS 822.015;
(L) "Document processing fee" means any monies or other thing of value, which a dealer charges to prepare, submit or prepare and submit documents pursuant to ORS 822.043;
OFFICIAL COMMENTARY: Oregon law and administrative rules permit dealers to elect to prepare, submit, or prepare and submit documents necessary to issue or transfer a certificate of title for a vehicle; register a vehicle or transfer registration of a vehicle; issue a registration plate; verify and clear a title; perfect, release or satisfy a lien or other security interest; comply with federal security requirements; or render any other services for the purpose of complying with state and federal laws related to the sale of a vehicle. For providing this service, dealers may charge a purchaser of a vehicle a fee for the preparation of those documents, not to exceed the amount established by ORS 822.043. This fee is always negotiable; otherwise it could be classified as a tax. A dealer can process the documents without charging a fee. In addition to the document processing fee, dealers may offer consumers the option of electronically filing their title and registration documents using an integrator. Dealers may charge consumers an additional fee for this service. Consumers must knowingly agree to pay the additional fee for this electronic filing service. If a consumer does not agree to pay the additional fee for the electronic filing service, a dealer may still electronically submit title and registration documents at no additional cost to the consumer.
(i) Manufactures or assembles new motor vehicles for sale or distribution;
(t) "Negative equity" means the amount by which an existing lien on a trade-in vehicle exceeds the true market value of the trade-in vehicle;
OFFICIAL COMMENTARY: In layman's terms, if a consumer has negative equity on his/her vehicle, it means the consumer owes more on the vehicle than it is actually worth. While the "true market value" of a vehicle may vary, it can be determined by using a motor vehicle price guide trade publication and the average sale price of the vehicle at regional vehicle auctions. While these publications are relevant, they are not determinative. Depending upon the supply and demand for a given vehicle, it could be worth more or less than its "book" value.
(v) "Offering price" means the full cash price for which a dealer will sell or lease a motor vehicle to every consumer or member of the general public without exception, excluding only taxes, license and registration costs, Department of Environmental Quality (DEQ) fees and a document processing fee;
OFFICIAL COMMENTARY: Examples of correctly calculated offering prices are as follows:
(z) "Publisher" means any person who publishes any advertisement;
(aa) "Rebate" means:
(i) The payment of money to a consumer or payment to a person on behalf of a consumer on the condition that the consumer purchase or lease a motor vehicle; or
(ii) The return of any part of a payment made by a consumer in conjunction with the sale or lease of real estate, goods or services and includes, but is not limited to, an offer of a future cash refund, a direct or indirect payment of money to a consumer or a voucher for future payments.
(bb) "Recreational vehicle" has the meaning given that term in ORS 650.300;
(dd) "Spot Delivery" or "Spot Delivered" means that a consumer has taken possession of a motor vehicle from a dealer or broker and the consumer has committed to buy or lease the vehicle, whether or not there is a finalized transaction or final approval of financing;
OFFICIAL COMMENTARY: Spot delivery occurs when a consumer signs a purchase order, lease agreement or retail installment contract for a motor vehicle and the consumer takes possession of the vehicle "on the spot," prior to a financial organization purchasing the retail installment contract or lease agreement from the dealer or a consumer presenting a dealer with payment for the full purchase price of the vehicle.
(ee) "Taxes, license and registration costs" means those usual taxes, charges and fees payable to or collected on behalf of governmental agencies and necessary for the transfer of any interest in a motor vehicle or for the use of a motor vehicle;
(ff) "Used vehicle" means any vehicle which has been previously:
(iii) Spot delivered.
OFFICIAL COMMENTARY: See Weigel v. Ron Tonkin Chevrolet Co., 298 Or 127, 690 P2d 488 (1984). Vehicles that would be considered "used" include, but are not limited to: new vehicles that are spot delivered to a consumer, then subsequently returned to the dealer for any reason, including, but not limited to, the inability of the dealer to sell the retail installment contract; demonstrators and company cars that have never been sold to a retail customer, but have been driven for purposes other than test drives or moving, including use by the dealer, the dealer's employees, the dealer's corporate officers or anyone else; and all vehicles that have been driven more than the limited use necessary in moving or test driving a new vehicle prior to purchase or delivery to a consumer.
(gg) "Vehicle identification number" or "VIN" means a number, a letter, a character, a datum, a derivative, or a combination thereof, used by the manufacturer or a Department of Motor Vehicles for the purpose of uniquely identifying a motor vehicle. For the purpose of this definition, any time a motor vehicle advertisement requires the publication of a "vehicle identification number," use of the last six numbers, letters or other characters will constitute compliance with the rule;
(hh) "Wholesale" means the sale of motor vehicles, goods or services for resale by a dealer, broker or other person, as opposed to the sale of motor vehicles, goods or services to the ultimate consumer;
(3) Violations: Failure by a person, in the course of the person's business, vocation or occupation, to comply with this rule constitutes unfair or deceptive conduct in trade or commerce.
(c) Offering Price — Any price stated in an advertisement or in a written or oral price quotation given to a consumer shall be the offering price, excluding only taxes, license, registration costs, DEQ fees and a document processing fee;
OFFICIAL COMMENTARY: A vehicle has one offering price. This rule is to ensure that dealers do not add in hidden or undisclosed costs after the price for a vehicle has been advertised or negotiated with a consumer or charge different prices depending on where a consumer sees an advertised offering price. Examples of potential violations are as follows:
(f) Unconscionable Add-on Pricing — A person may not make false or misleading representations concerning the nature or amounts of charges for additional goods, accessories, services, products or insurance sold in conjunction with the sale or lease of a motor vehicle by selling them at a price which is unconscionably higher than the price used by the person for the sale of the same or substantially similar goods, accessories, services, products or insurance to other consumers;
OFFICIAL COMMENTARY: This rule does not limit a dealer's ability to mark up or down the selling price of a product or service in the normal course of business. This includes offering special discounts to repeat customers or volume discounts to purchasers of large quantities of products or services. However, sometimes dealers try to unlawfully take advantage of the most vulnerable consumers, such as those who are illiterate, have a physical infirmity, have a mental handicap, are unable to understand the English language or have other limitations.
(k) Undisclosed Fee Payments — A dealer who sells or leases a motor vehicle to a consumer and makes any payment to any non-employee third-party in conjunction with the sale or lease, other than a referral fee of $100 or less (also known as a "bird-dog" payment), must specifically itemize such payment on the consumer's purchase order, lease agreement and retail installment contract;
OFFICIAL COMMENTARY: This rule is intended to apply to a payment of more than $100 made to a single individual or business entity. For example, if two unrelated individuals refer a purchaser to a specific dealership, each individual may receive a payment of $75 and the dealer does not need to specifically itemize the payments. However, the dealer may not make a payment of $75 to a dealership and $75 to the owner of the dealership and fail to itemize the $150 payment on the purchase order, lease agreement and retail installment contract.
(L) False Representations Regarding Financing or Goods — A person may not falsely represent to a consumer that, unless the consumer purchases additional goods, accessories, services, products or insurance, the person will not sell or lease a motor vehicle to the consumer or cannot provide credit or financing for the consumer. A person may not falsely represent to a consumer that additional goods, accessories, services, products or insurance are free or included in the price of a motor vehicle or the financing;
OFFICIAL COMMENTARY: Nothing in this rule prohibits a dealer from ensuring that a consumer has motor vehicle insurance required by law or according to the terms of financing in order to protect the collateral financed. No person, however, can make false statements regarding any requirement to purchase products or services. This rule does not prohibit dealers from adding tangible accessories, which enhance the value and marketability of a vehicle to some of their inventory, and including the tangible accessories in the offering price of the vehicle. If a dealer adds high profit aftermarket products, including, but not limited to, paint protector, door edge guards and glass etching, to its vehicles which do not correspondingly increase the actual cash value of the vehicles, such practice would be carefully scrutinized as a possible violation of this rule.
(m) Payment Price Packing — During negotiations for the sale or lease of a motor vehicle, a dealer or broker may not quote to a consumer a monthly payment or total price for the sale or lease of a motor vehicle that includes the cost of any additional goods, accessories, services, products or insurance, including, but not limited to, service contracts, security products, protectants, credit life or gap insurance, that are sold in conjunction with the sale or lease of a motor vehicle, unless the dealer or broker also clearly and conspicuously separately delivers in writing, during negotiations and prior to any purchase order, lease agreement or retail installment contract being executed by a customer:
(B) The total cost of the lease or sale of the vehicle and the monthly payment, without such additional items included.
OFFICIAL COMMENTARY: This rule addresses the practice that is commonly referred to as "packing," or the "presumptive sale." "Packing" is the deceptive practice of misrepresenting monthly payments or total cost of a vehicle to consumers during motor vehicle sales and lease negotiations in order to surreptitiously facilitate the sale of additional motor vehicle related goods, accessories, services, products or insurance. Consumers are entitled to be treated in a fair and non-deceptive manner during negotiations to buy or lease a motor vehicle, including the right to receive timely, accurate and non-misleading information about the cost of the vehicle and all related goods, accessories, services, products or insurance they are buying or leasing. Some dealers have used "packed" payment schemes and poor disclosures to trick consumers into believing that services such as credit insurance, vehicle service contracts, chemical protection, and security devices are included at no additional cost or provided "free" in the purchase or lease agreement; or that they are discounted when they are not. Others have quoted monthly payments calculated upon interest rates far in excess of what they believe will be the final interest rate or simply add an extra $40 or more to the monthly payment than what is needed to cover the price of the vehicle. They use this inflated quote in order to build in some "legroom" to later add other optional products and services to the transaction with the extra cost hidden or appearing lower to the consumer. Because the monthly payment does not increase and because the consumer believes the products are "free" or discounted, most consumers do not object when the products are included in the final contract.
(o) Disclosure of Material Nonconformities and Defects — Prior to the sale or lease of a motor vehicle, a dealer or broker shall disclose existing material nonconformities and defects about which the dealer or broker knows or negligently disregarded when the dealer or broker should have known. This includes, but is not limited to if repairs have not been performed pursuant to a safety recall and the needed repairs can be identified through a VIN search;
OFFICIAL COMMENTARY: Unless explicitly disclosed prior to a sale or lease, a motor vehicle that is offered for sale or lease to the public is represented, either directly or by implication, to be roadworthy when it is sold, to have an unbranded title and to have no undisclosed material defects. A dealer is not required to guarantee, warrant or represent that a used vehicle will not have any mechanical problems or undetected material defects once the vehicle is sold. However, for used vehicles, even if the dealer states on the FTC Buyers Guide (“As Is”) that the dealer is not providing a warranty, the dealer must still disclose material defects about which the dealer knew or should have known. See Parrott v. Carr Chevrolet, 156 Or App 257 (1998), aff. 331 Or 537 (2001) and Hinds v. Paul’s Auto Werkstatt, 107 Or App 63, 810 P2d 874 (1991). For new vehicles, even if the dealer does not need to disclose damage and repairs under ORS 650.155(6), the dealer must still disclose material defects about which the dealer knew or should have known. See BMW of North America v. Gore, 517 US 559 (1995). The dealer is in a superior position to inspect and determine the condition of a vehicle prior to marketing the vehicle. It is an easy matter, through a number of industry and internet sources, for a dealer or broker to review a vehicle's title, damage and ownership history. Examples of negligent disregard of some things that should put a dealer on notice and trigger its duty to disclose might include, but is not limited to, a large pool of oil or antifreeze under the vehicle, dark colored smoke coming from an exhaust pipe, water stains on carpet or doors, a different color paint than the body under the hood or in the trunk or tires that are worn very unevenly. A dealer does not need to create an exhaustive list of every ding, paint scratch, fabric tear or discoloration clearly visible upon inspection by an average consumer. When a dealer sells a vehicle to an individual that is registering the vehicle in a metro area that requires that the vehicle pass DEQ emissions testing to be roadworthy, the dealer must ensure that the vehicle can pass the DEQ emissions test at the time of sale.
(q) False Statement of Broker Fees — A broker may not misrepresent the source or nature of any profit, compensation or fee which the broker will receive for its services or cause a consumer to believe the services are free or at no cost to the consumer, when they are not;
OFFICIAL COMMENTARY: Brokers are a fiduciary of a consumer on whose behalf they have agreed to negotiate the purchase or lease of a vehicle. Unlike a dealer, a broker is not engaging in an "arm's length" transaction. Brokers market their services to act in the consumer's best interest. They are in an agency relationship. The consumer has a right to rely on that relationship. For example, a broker who tells a consumer that the broker may be receiving compensation from a dealer as part of the transaction, when the funds for that payment were part of the total amount paid by the consumer as part of the purchase or lease, is misrepresenting the nature of the transaction and making a false statement as to the source of the funds the broker will be receiving. The correct disclosure would be that the broker has added its fee to the price which it negotiated with the seller on behalf of the consumer. While ORS 822.047 does not require the broker to disclose the amount of its profit, once the broker undertakes to act on behalf of a consumer, or do anything that could cause a consumer to believe the broker is acting on the consumer's behalf, the dealer or broker may no longer engage in self-dealing, but must act in the consumer's best interest. Further, if a consumer asks what the fee is for the service, the broker may not misrepresent the amount of the fee being charged. In no case may the broker misrepresent the nature of the charge, the amount of the fee or in what way the fee for the broker's service is paid.
(r) Disclosure of Dealer/Broker Status — A dealer or broker may not misrepresent or fail to disclose whether it is acting as a dealer or broker when it has done anything to cause a consumer to believe it is acting as a broker for the consumer in the purchase or lease of a motor vehicle;
OFFICIAL COMMENTARY: It is well established in law that a broker is in a fiduciary relationship with its client. As such, a broker occupies a position of such power and confidence with regard to the property of another that the law requires brokers to act solely in the interest of the person whom they represent and in good faith. Fiduciary duties can be grouped into three categories: (A) Duty of Loyalty. A fiduciary must act in accordance with the interests of the beneficiary, and not his own interests; (B) Duty of Candor. A fiduciary must not withhold information from the beneficiary, particularly with respect to the fiduciary's dealings with the beneficiary; and (C) Duty of Care. A fiduciary must act with some degree of care with respect to the beneficiary. This is usually formulated as a duty to exercise the care that an ordinarily prudent person would in similar circumstances.
In Oregon, only one type of dealer license is required, whether the licensee acts as a dealer or broker. This can lead to confusion by a consumer. If the consumer believes the person the consumer contacted was a broker, the consumer expects that person to act in the consumer's best interest. Brokers have an obligation to ensure the consumer knows what the broker's business status is in relation to the transaction and whether the consumer is dealing with it as a broker or a dealer. If a consumer first contacts a dealer who does not have a vehicle in its own inventory that the consumer wishes to buy or lease, and the dealer agrees to find, negotiate or arrange the purchase or lease of a specific vehicle for the consumer from a third party, a broker relationship may be created. If the dealer, without placing any obligations on the consumer, finds the desired vehicle, purchases it and places it into the dealer's own inventory, the dealer may thereafter negotiate and sell or lease the vehicle to the consumer and still remain a dealer. However, a dealer may become a broker under several circumstances, including, but not limited to, the following: the dealer places a contractual or monetary obligation on the consumer in order to arrange or negotiate the purchase or lease of the vehicle; the dealer makes any statement which could cause an average consumer to believe the dealer was acting as an agent of the consumer (such as saying the dealer would negotiate the best price for the transaction); or the dealer arranges the transaction for the consumer through another dealer and receives any compensation from the consumer or other dealer.
(s) False Credit Applications — No person shall for any motor vehicle transaction:
(t) Illusory or Deferred Down-Payments and Hold Check Agreements — In any transaction for a motor vehicle:
(A) No person shall request or accept from a consumer as payment for any part of a purchase or lease, or list the same as a down payment on any purchase order, lease agreement, retail installment contract, or credit application, any of the following:
(u) Yield Spread Premium Disclosure — Any dealer or broker that charges a consumer a yield spread premium:
(A) Shall clearly and conspicuously disclose in writing, prior to the consumer applying for credit or executing a purchase order, lease agreement or retail installment contract:
(z) Anti-Bushing Rule — In any transaction in which the dealer or broker has spot delivered a vehicle to a consumer and the consumer does not qualify for the terms offered, the dealer or broker shall, prior to offering, negotiating or entering into new terms for the purchase or lease of a vehicle:
(C) If the dealer or broker informs a consumer by telephone or other means, without the consumer present, that the consumer did not qualify for the terms offered, clearly disclose the consumer's right to receive the immediate return of all items of value given by the consumer as part of the transaction when the consumer returns the spot delivered vehicle. The consumer's down payment and trade-in must be actually available to the consumer should the consumer wish to rescind the transaction and not enter into a new transaction. If a consumer has paid a down payment with a check, the dealer is not required to refund the down payment until the consumer's check has cleared.
OFFICIAL COMMENTARY: ORS 646A.090 gives both dealers and consumers specific rights when it is necessary to unwind a spot delivery transaction. The consumer has an absolute right to walk away from the deal and get back his/her trade-in and down payment if the dealer is not going to honor the original agreed upon offer.
(aa) Unlawful Negative Equity Adjustment — No person shall make a negative equity adjustment in the sale or lease of a motor vehicle;
OFFICIAL COMMENTARY: Under Regulation Z, if the amount of an existing lien exceeds the value of a trade-in, a creditor must disclose the down payment as zero and not a negative amount on the down payment line of the retail installment contract. To illustrate, assume a consumer owes $10,000 on an existing motor vehicle retail installment contract or loan and that the trade-in value of the motor vehicle is only $8,000, leaving a $2,000 deficit. The creditor should disclose a down payment of $0, not -$2,000.
(bb) Negative Equity Disclosure — Any negative equity of a vehicle taken in trade as part of any motor vehicle transaction shall be clearly and conspicuously disclosed in any purchase order, lease agreement and retail installment contract.
(cc) Consignment Sales — If a person takes a vehicle on consignment, the person may not falsely represent or imply the amount that a potential purchaser has offered to pay for the vehicle or the amount that the consignor has agreed to accept for the sale of the vehicle.
OFFICIAL COMMENTARY: When a dealer takes a vehicle on consignment, the dealer is acting as an agent for the consignor. The dealer may not tell a prospective customer that the consignor will not accept a particular offering price for a vehicle when that offering price is above the price the consignor has agreed to sell the vehicle for. Additionally, the dealer may not misrepresent or fail to disclose an offering price to the consignor. It is unlawful for a dealer who takes a vehicle on consignment to ask the consignor to agree to a reduction in the amount listed in the consignment agreement when the dealer has received an offering price from a prospective customer that is higher than the amount the consignor has agreed to sell the vehicle for because the dealer wants to negotiate a higher profit for the dealer from the sale of the vehicle.
(dd) Dealer Cost — A dealer shall not misrepresent or fail to disclose the MSRP of a new vehicle. A dealer shall not state or imply that the MSRP is the dealer’s cost.
OFFICIAL COMMENTARY: When negotiating the sale of a vehicle, a dealer may not misrepresent or fail to disclose the MSRP of the vehicle. For example, the Monroney sticker shows that the MSRP of a vehicle is $30,000. The dealer posts an extension sticker that shows the dealer added $5,000 of additional dealer profit and the dealer’s offering price is $35,000. When negotiating the vehicle, the dealer fails to disclose to the potential purchaser that the MSRP of the vehicle is $30,000 and the dealer’s offering price is $35,000. It is unlawful if the dealer represents to the consumer that the “market price” of the vehicle is $35,000 and the dealer is offering the consumer a $3,000 savings by starting negotiations at $32,000. Similarly, if the dealer obtains a vehicle through a dealer trade, the dealer must disclose that the MSRP of the vehicle is $30,000 and cannot represent to the consumer that the vehicle is $35,000 without also disclosing the MSRP and that the $35,000 offering price includes $5,000 of dealer mark-up.
(ee) Provide Copy of Contract — A dealer must provide the purchaser of a vehicle a copy of all documents signed or initialed by the purchaser or that are material to the terms of the sale.
OFFICIAL COMMENTARY: When a consumer signs a purchase order, lease agreement or retail installment contract, the dealer should promptly provide a consumer with a signed copy of the agreement for the consumer’s records. The dealer should also provide the consumer with any other documents that are material to the terms of the sale, such as a “we owe” form that reflects that the dealer will perform post-delivery repairs.
(ff) Document Processing Fee — If a dealer collects money from or charges a purchaser a document processing fee, the dealer must prepare and submit all documents to complete the transaction as permitted by law.
ORS 646.608(1)(u)
ORS 646.608(1)(u)
DOJ 17-2015, f. 12-31-15, cert. ef. 1-1-16
DOJ 15-2007, f. 12-20-07, cert. ef. 1-2-08
DOJ 3-2002, f. & cert. ef. 4-22-02
Reverted to JD 3-1996, f. 10-18-96, cert. ef. 10-23-96
DOJ 10-2001(Temp), f. & cert. ef. 10-17-01 thru 4-14-02
JD 3-1996, f. 10-18-96, cert. ef. 10-23-96
JD 4-1993, f. 8-6-93, cert. ef. 8-16-93
1AG 6-1979, f. & ef. 12-19-79