Convertibles.Barry,a new car dealer,advertised that a new brand of convertible called Wind would be available at his dealership for the price of $10,000 each.He had only three Wind vehicles,however,and when those were sold,he tried to convince shoppers to purchase a much more expensive new convertible at a price of $25,000.Kathy,a customer who decided to purchase one of the more expensive vehicles,needed financing in order to do so.She had $10,000 to pay on the car and sought a loan from ABC Bank for the remainder.She wanted the loan for a specific amount of time.ABC Bank offered her the loan and she agreed.The only information she received from ABC Bank was confirmation that she borrowed $15,000 at an 8% interest rate.After receiving several complaints,the Federal Trade Commission disapproved of Barry's action in regard to the Wind vehicles.Claiming that his advertisement was misleading,the Federal Trade Commission proceeded to issue a cease-and-desist order prohibiting deceptive advertising involving Wind vehicles and any other vehicles Barry offered for sale.What kind of objectionable advertising,if any,was Barry engaged in when he offered convertibles for sale for $10,000 but only had three and then tried to convince customers to purchase a much more expensive vehicle?

Question

Quizplus · Accepted Answer

When sellers advertise a low price for an item generally unavailable to the consumer and then push the consumer to buy a more expensive item,they are engaging in bait-and-switch advertising.The low advertised price baits the consumer.Then the salesperson switches the consumer to a higher-priced item.In 1968,the Federal Trade Commission prohibited bait-and-switch advertising.