Advertising lawyers, including in-house counsel and outside counsel, need to comply with laws involving false, unfair and deceptive acts

Advertising Consumer Leases

If you advertise consumer leases, the Federal Trade Commission has important information for you: Your ads must comply with the streamlined rules for lease advertising found in the Consumer Leasing Act (CLA) and Regulation M. These requirements focus on essential lease information for consumers and are designed to help consumers shop and compare lease terms. The current rules became effective January 1, 1998.

This brochure answers frequently asked questions about the general advertising requirements of the CLA and Regulation M, the specific disclosure requirements, and the liability for violations.

General Requirements

Q. What's a consumer lease?

A. A lease of personal property to an individual for more than four months for personal, family or household use where the total contractual obligation is not more than $25,000.

Q. Who's covered?

A. Lessors, automobile dealers, merchants - in short, anyone who advertises consumer leases - must comply with the advertising disclosure requirements spelled out in the CLA and Regulation M.

Q. Are the media covered?

A. No.

Q. What's a lease ad?

A. Any message that invites, offers or announces to the public the availability of a consumer lease, whether in visual, oral or print (including electronic) media. That includes:

Q. What's clear and conspicuous disclosure?

A. The required disclosures in your ad must be reasonably understandable. That is, consumers must be able to see and read or hear, and understand, the information. Many factors, including the size, duration, and location of the required disclosures, and the background or other information in the ad, can affect whether the information is clear and conspicuous. This requirement applies to all mandatory disclosures, including those offered through a toll-free (or collect or local) telephone number.

Q. What terms can the ad offer?

A. The terms offered must be usually and customarily available.

Specific Requirements

Q. What terms trigger disclosures in the revised regulation?

A. If your ad includes any of these triggering terms:

It must include these disclosures clearly and conspicuously:

Q. What disclosure rules apply to the total amount due at consummation or delivery?

A. Keep in mind the following:

Q. What if my ad promotes several leased items?

A. If a triggering term appears, you can use an example of one or more typical leases - if you disclose the required terms that apply to each. The examples must be labeled as such and must reflect representative lease terms made available to consumers.

Q. Is there a special option for radio and TV ads?

A. The triggering terms and required disclosures described above apply to all lease ads. But, if your radio or TV ad refers clearly and conspicuously to a toll-free (or collect or local) phone number through which consumers can obtain the required lease information, and if you follow certain procedures, you can somewhat limit the information provided in your radio or TV ad. To use this approach, your radio or TV ad still must clearly and conspicuously state:

Your radio or TV ad also must clearly and conspicuously indicate that consumers can get all the required disclosures through the toll-free (or collect or local) phone number or print ad. Your radio or TV ad also must include the publication's name and date.

Q. Are there other special procedures for the toll-free (or collect or local) phone number and print ads?

A. Yes, the toll-free (or collect or local) phone number described above - which only applies to radio and TV ads - must be established no later than the ad's air date. It also must continue for at least 10 days after the air date. Callers must be given all the required disclosures early in the message. A clear and conspicuous written copy of the disclosures also must be given to anyone who asks for it.

Print ads described above must appear in a general circulation publication in the community served by the media station. A newspaper circulated nationally, such as USA Today or the Wall Street Journal, could meet this requirement. The print ad must appear at least three days before the radio or TV ad airs, and continue for at least 10 days after the air date. The print ad must clearly and conspicuously include all the required disclosures.

Q. Are there special rules for advertising a lease rate?

A. Yes, your ad must include the following statement near the rate without any intervening language or symbols: "This percentage may not measure the overall cost of financing the lease." In addition, except for the notice, the rate cannot appear more prominently than any terms in the ad that are required written disclosures under the amended CLA and Regulation M, such as "gross capitalized cost," "residual value" and others. You also cannot refer to the lease rate as an "annual percentage rate," "annual lease rate," or other equivalent term.


If your ads don't comply with the law, you could face enforcement actions or civil lawsuits. For advertisers under the FTC's jurisdiction, that could mean:

For More Information

To learn more about advertising requirements for consumer credit and lease offers, see How to Advertise Consumer Credit and Keys to Vehicle Leasing.

Your Opportunity to Comment

The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from small businesses about federal compliance and enforcement activities. Each year, the Ombudsman evaluates the conduct of these activities and rates each agency's responsiveness to small businesses. Small businesses can comment to the Ombudsman without fear of reprisal. To comment, call toll-free 1-888-REGFAIR (1-888-734-3247) or go to

August 2000

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