Advertising and the Consumer Leasing Act – Overview

Advertising and the Consumer Leasing Act

The Consumer Leasing Act and Regulation M contain special requirements for the advertisement of a “consumer lease,” i.e., a lease for personal property to an individual for more than four months for personal, family, or household use where the total contractual obligation is not more than $ 25,000.

Major Requirements of the Act

Under the Act and Regulation M:

1. An ad for a consumer lease must include disclosures of certain information;
2. Special disclosure rules apply to radio and television ads;
3. Special rules and restrictions apply to ads that refer to lease rates; and
4. The terms offered in the ad must be usually and customarily available.

Violations of the Act

The Federal Trade Commission (FTC) enforces the advertising disclosure requirements of the Act and Regulation M. The FTC is authorized to file civil lawsuits against persons who violate the advertising disclosure requirements. A person who violates the advertising disclosure requirements may be subject to a cease and desist order, an injunction, a fine, and damages.

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