Ford in 51.1 Million Dollar Settlement Over Advertising

Ford, last week, reached a settlement with Tennessee Attorney general and 52 other jurisdictions regarding alleged deceptive trade practices relating to the sales of Ford SUVs. The Attorneys alleged that Ford failed to disclose a known safety risk concerning tyre failures with certain Firestone ATX and Wilderness AT tyres which came equipped on some Ford SUVs. The State also alleged that Ford’s advertising misled consumers as to the safe use of Ford SUVs.

Other allegations included certain aftermarket tyres sold through Ford’s “Around the Wheel” program were the same tyres as the tyres that came equipped on Ford SUVs when that was not true. Ford denied all such allegations. However, they have agreed to settle nonetheless.

Tennessee Attorney General, Paul Summers, said, “This investigation was about fair advertising and the safety of Tennesseans. “The states alleged that Ford continued to use the tyres even after the company knew from many different sources the tyres had an unacceptably high failure rate when used on Ford Explorers and Mercury Mountaineers and that using the tyres made Ford’s SUVs more likely to roll-over.”The states also made allegations that Ford knowingly and deceptively advertised about the safe loading capacity and handling of Ford SUVs, and that Ford deceptively advertised aftermarket tyres as original equipment tyres.

The State alleged that Ford advertised the Explorer was a “truck” built on a truck chassis, thus confusing the distinctions between the Explorer and a passenger car.It was claimed that the company misled consumers over loading capacity. However post-sale disclosures warned customers that the cargo capacity was limited by weight, not volume, and that safety risks such as tyre failure and roll-over were increased by exceeding the weight limitation.

It was further alleged that the weight limitation on the Explorer was less than on competitors’ vehicles, contrary to Ford’s advertising campaign. Indeed, the state suggested that if an Explorer had a full complement of passengers and all the Ford optional extras fitted, the vehicle would already exceed the maximum cargo load without carrying any cargo.The settlement contains clauses prohibiting Ford from making misrepresentations about their vehicles’ capabilities, stating that Ford must be able to substantiate any such claims it makes in future.

Ford will also be launching a number of initiatives in 2003 to help increase public awareness about how they can minimise the risk of roll-over.The settlement fees will be used to meet costs and 30 million dollars will be used by the states involved to advance road safety, tyre awareness and roll-over awareness..