A U.S. appeals court on Monday threw out rules adopted by the Biden administration to ban bait-and-switch tactics and prohibit auto dealers charging for add-on costs that do not benefit new car buyers.
The 5th Circuit Court of Appeals in a 2-1 decision in response to legal challenges by the National Automobile Dealers Association and a Texas dealer group said the Federal Trade Commission had violated procedural rules in writing the regulation without giving advance notice of the planned regulation.
The rule, which was proposed in 2022 and finalized in January 2024 but put on hold pending the legal challenge, required up-front pricing in dealers’ advertising and sales discussions and informed consent from consumers before charging for any item.
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