The mid-November deadline set by Sen. Ed Markey (D-Mass.) in a letter to the Federal Trade Commission (FTC) over "yo-yo" auto financing is approaching. The legislator in late October petitioned the agency to launch a new probe into vehicle lending practices that "suggest that some dealers may be engaged in unfair or deceptive trade practices that may be in violation of some of the federal laws within the Commission's jurisdiction."
Yo-yo financing -- which involves selling a new car based on one set of finance terms and then pressuring the buyer into more expensive terms later after claiming that the financing did not go through -- received a lot of recent exposure through an ABC News hidden camera investigation. The FTC's Malini Mithal said at the time that the agency is aware of the problem and is working to rein in deceptive practices. "Yo-yo might sound like it's making light of the term, but it really is kind of showing you the whole 'jerking of the consumer back and forth' issues we're concerned about," Mithal stated. "It's very difficult for consumers to deal with these types of issues and the FTC is committed to protecting consumers in this area."