Recent developments have brought significant regulatory changes to the automotive industry.

Recent court rulings have overturned the FCC’s One-to-One Consent Rule and the FTC’s CARS Rule, but the need for transparency and ethical consumer practices remains critical.

On January 27, 2025, the Eleventh Circuit Court of Appeals overturned the Federal Communications Commission’s (FCC) 2023 Order on the Telephone Consumer Protection Act (TCPA). Meanwhile, the Fifth Circuit Court of Appeals recently invalidated the FTC’s Combating Auto Retail Scams (CARS) Rule. While these rulings have been met with relief in the automotive community, the fact that they existed at all underscores the need for continued vigilance in adhering to pro-consumer practices.

The Fifth Circuit’s invalidation of the CARS Rule eliminated certain provisions aimed at ensuring advertising transparency and price clarity. While this ruling eases immediate compliance requirements, it’s essential for dealerships to maintain ethical advertising practices. Misleading or opaque marketing can harm consumer trust and lead to negative reviews and reputational damage.

The Spirit Behind the Regulations

The FCC’s One-to-One Consent Rule and the FTC’s CARS Rule shared a common goal: protecting consumers from unfair, deceptive, or intrusive practices. The One-to-One Consent Rule was enacted to curb telemarketing abuse, ensuring that businesses respect consumers’ communication preferences. Similarly, the CARS Rule sought to enhance transparency and fairness in advertising, pricing, and promotional activities.

Misleading or opaque marketing can harm consumer trust and lead to negative reviews and reputational damage.

They originated in response to significant consumer complaints about aggressive telemarketing campaigns, misleading advertising, and bait-and-switch tactics. By adhering to the principles behind these rules, dealers can foster trust, build long-term loyalty, and maintain a positive reputation in a highly competitive industry. While the One-on-One requirement and the CARS Rule have been overturned, dealers and dealer partners shouldn’t ignore the spirit behind it.

Consumer Protection and the Benefits to Dealers

Regulatory shifts aside, the majority of dealers will continue to offer a straightforward and transparent shopping and purchasing process. Consumer protection is the main motivator, but there are other benefits to dealers who operate fairly and transparently.

• Building Trust: Transparency and ethical practices foster trust, which is critical for long-term success. Customers are more likely to return to dealerships they perceive as honest and fair.
• Competitive Advantage: Dealers who prioritize consumer-friendly behavior can differentiate themselves in a crowded market, using their reputation as a key selling point.
• Reputation Management: Negative reviews, regulatory investigations, or consumer complaints can cause lasting harm. Proactively adopting consumer-friendly policies reduces these risks.
• Futureproofing: Just because specific regulations have been overturned doesn’t mean new rules won’t emerge. Establishing a foundation of consumer-friendly practices now can help dealerships adapt to future changes with ease.

While the more cumbersome aspects of the CARS rule have been overruled, the spirit behind them remains a necessary focus for the entire industry. Transparency during the purchase process is important not just because it’s the right thing to do, but because of the increased engagement rates we see when customers are provided with clear information throughout the shopping and buying process. Here are some key items dealers should focus on:

• Transparent Consent Processes: Clearly inform consumers about the types of communications they will receive and from whom. Even without the “one-to-one” consent requirement, specifying the nature and purpose of communications fosters trust. When choosing partners, be sure CRM and other third-party companies are committed to supporting your dealership with these practices.
• Honest Advertising: Ensure all advertising is transparent, truthful, and compliant with state and local laws. Happy Hao Car is committed to partnering with dealers to offer compliant websites and to support partners in this ever-evolving landscape.
• Dedication to Consumer Privacy: Prioritize obtaining explicit consent before contacting consumers and provide clear opt-out options.
• Staff Training: Regularly train employees on consumer-friendly practices and protection to ensure alignment with best standards.
• Monitor Industry Changes: Stay informed about regulatory updates to anticipate and adapt proactively. The Happy Hao Car blog will continue to provide updates and insights on updates like these and general industry data insights and proven practices as well.

The recent court decisions on FCC and FTC oversight reflect the evolving nature of consumer protection regulations. While these decisions may reduce immediate compliance obligations on the federal level, many states have already passed similar laws and regulations. These judicial decisions should therefore not be seen as a license to cut corners. Instead, they present an opportunity for dealers to reinforce their commitment to transparency, fairness, and consumer-friendly practices. By embracing the spirit of these regulations, dealers can build stronger relationships with their customers, mitigate risks, and position themselves as industry leaders. Trust and integrity remain the ultimate drivers of long-term success.

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Aurko Chatterjee serves as the SVP of Product Development & Marketing at Happy Hao Car - overseeing the product management, UX, Data and Marketing functions. He joined Happy Hao Car 9 years ago and has played a role in building and shaping multiple teams over his tenure. Prior to joining Happy Hao Car, Aurko worked for Cox Automotive and Google Inc.

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