Leota Sage saw a local motorcycle dealer’s newspaper advertisement offering a MetroRider EZ electric scooter for \($1,699.\) When she went to the dealership, however, she learned that the EZ model had been sold out. The salesperson told Sage that he still had the higher-end MetroRider FX model in stock for \($2,199\) and would sell her one for \($1,999.
Sage\) was disappointed but decided to purchase the FX model.
When Sage said that she wished to purchase the scooter on credit, she was directed to the dealer’s credit department.
As she filled out the credit forms, the clerk told Sage, who is an Asian American, that she would need a cosigner to obtain a loan. Sage could not understand why she would need a cosigner and asked to speak to the store manager.
The manager apologized, told her that the clerk was mistaken, and said that he would “speak to” the clerk. The manager completed Sage’s credit application, and Sage then rode the scooter home. Seven months later, Sage received a letter from the manufacturer informing her that a flaw had been discovered in the scooter’s braking system and that the model had been recalled. Using the information presented in the chapter, answer the following questions.
1. Did the dealer engage in deceptive advertising? Why or why not?
2. Suppose that Sage had ordered the scooter through the dealer’s website but the dealer had been unable to deliver it by the date promised. What would the FTC have required the merchant to do in that situation?
3. Assuming that the clerk required a cosigner based on Sage’s race or gender, what act prohibits such credit discrimination?
4. What organization has the authority to ban the sale of scooters based on safety concerns?