Chapter 24, Problem 1RE

Summary Introduction

Case summary:The person LS an African American read an advertisement in the newspaper from a local motorcycle dealer about the sale of electronic scooter EZ for $1,699. The person LS reached the dealer to purchase the scooter but found that the scooter is already sold. The salesperson offered higher model FZ from the previous one in $1,999. The person LS unwillingly decided to buy the scooter FZ and further wished to purchase the scooter on credit. The clerk in the credit department told the person LS that a cosigner is required to obtain a loan. When the person LS talked about this concern to the manager, he assured her that the clerk has been mistaken. The person LS after seven months from purchase received a letter from the manufacturer notifying her about recalling the model due to defect in the braking system.

To find: The engagement of dealers in deceptive advertising.

Explanation of Solution

Deceptive advertising refers to the advertisement which misleads the consumer to buy with an expectation for the product to be genuine in accordance with the advertisement. The above case is an example of Bait and Switch advertising. It occurs when the seller performs any of the following acts: (1) The seller does not portray the advertised product, (2) stocks’ inadequate quantity. In the above case, when the person LS reached the dealer to purchase an advertised scooter, the dealer remarked it to be sold out and offered a higher model instead of the model advertised. Therefore, the dealer was involved in deceptive advertising.