FTC files suit over deceptive COVID-19 stimulus auto sales mailers

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Deceptive covid-19 stimulus mailer
The envelope used by the defendants to lure consumers to auto sales events Image Source: FTC

The Federal Trade Commission (FTC) filed a lawsuit against a marketing company in Louisiana and its owner for allegedly using deceptive COVID-19 stimulus mailers to lure consumers to car sales events.

In the complaint, the FTC named the defendants as Traffic Jam Events, LLC, and its owner David J. Jeansonne II.

traffic_jam_events_complaint

The defendants allegedly violated the FTC Act 15 U.S.C. § 53(b), by sending deceptive marketing materials to consumers and taking advantage of the COVID-19 stimulus relief. Millions of Americans have been waiting for the stimulus relief, which the federal government is providing under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The law authorizes a $1,200 stimulus payment to individuals, $2,400 to married couples plus $500 per child. Additionally, it provides deferrals on payments for federally-backed mortgages and student loans. It does not provide relief for auto loans or auto-related financing.

According to the FTC, Traffic Jam Events and Jeansonne have been sending consumers mailers containing deceptive advertising since March 2020. The mailsers were labeled “IMPORTANT COVID-19 STIMULUS DOCUMENT” and instructed consumers to go to the “relief headquarters” to “claim these stimulus incentives.”

The mailers also included a notice stating, “URGENT: COVID-19 ECONOMIC AUTOMOTIVE STIMULUS PROGRAM RELIEF FUNDS AVAILABLE • ALL PAYMENTS DEFERRED FOR 120 DAYS.”

It also included a supposed check issued by the “Stimulus Relief Program” with the memo field stating “COVID-19 AUTO STIMULUS” and space to endorse the check on the back. The notice header included a barcode, a notice number, and a watermark similar to the Great Seal of the United States.

The defendants’ mailers led consumers to believe they could obtain the COVID-19 stimulus relief in person at the “relief headquarters” in Florida and “designated local headquarters.” In reality, the “headquarters” were auto sales events, according to the FTC.

The Commission noted in the complaint that the defendants have been the subject of previous law enforcement actions for using deceptive advertising in Kansas in 2010 and 2012, as well as in Indiana in 2018. The defendants are also facing a lawsuit filed by the Florida Attorney General on April 23, 2020, also regarding deceptive mailers.

The FTC is requesting the court to stop Traffic Jam Events and Jeansonne’s unlawful practice and order them to provide redress to consumers. The Commission is also asking the court to stop the defendants from further violations of the FTC Act.