Consumers are accustomed to getting letters from credit card companies telling them they are "pre-approved" for a new account. Of course, in many cases it turns out they aren't.

Now, a company that markets car loans in the same manner has run afoul of the U.S. Federal Trade Commission (FTC). The agency accuses it of telling low-income and "credit-challenged" consumers that they were pre-approved for auto loans.

According to the FTC, Direct Marketing Associates Corp. and its president and owner, John M. Rainey, Jr. prepared sales solicitations for automobile dealers telling consumers that a specific finance company would lend them money to buy a car, but the finance companies featured in the ads lacked business licenses and didn't actually make any loans.

The marketing company obtained lists of consumers from a credit-reporting agency by falsely representing that the lists would be used to make prescreened firm offers of credit to consumers.

In a settlement with the government, the company and its principal are barred from telling consumers they are pre-approved for, or are likely to receive, an extension of credit or financing unless the defendants know that a lender can make good on the offer for all eligible customers.

The order also prohibits the defendants from obtaining credit reports from consumer reporting agencies without a purpose authorized by the Fair Credit Reporting Act.

The order imposes a $157,000 civil penalty that is suspended based on the defendants' inability to pay. The full judgment will be imposed if they are found to have misrepresented their financial condition.