CarMax Inc. and two other used-car merchants have settled complaints from federal regulators that they promoted their evaluations in marketing however failed to disclose that a few of the automobiles were under safety recalls and unrepaired.
The Federal Trade Commission on Friday revealed the contracts with CarMax, the biggest U.S. used-car dealer, Asbury Automotive Group Inc. and West-Herr Automotive Group.
The firm also finalized agreements in comparable cases with General Motors and two other merchants.
Under the FTC’s proposed consent orders, which are open to public remark through January 17, CarMax, Asbury and West-Herr cannot declare that secondhand vehicles are safe unless recall repair works are made or open recalls are revealed. The companies were not penalized.
They likewise have to alert recent clients by mail that vehicles they bought as far back as July 1, 2013 may go through recalls.
After the public remark period closes, the FTC will choose whether to make the proposed consent orders final.
Companies that promote automobile evaluations and safety need to be honest about recalls, the firm states. The FTC says it has actually taken about 40 actions to safeguard car purchasers since 2012.
CarMax kept in mind that it will change some language about recalls in its advertising. The company stated that it shares vehicle-specific recall details in its stores and online to make sure that customers understand them before purchasing vehicle. “We will continue to make improvements to our thorough recall disclosure program,” CarMax Chief Operating Officer Cliff Wood informed.
The consent orders with General Motors, Jim Koons Management and Lithia Motors Inc. were planned in January.
A consumer group criticized those contracts as failing to secure automobile purchasers and really damaging customers. By permitting the companies to reveal that cars might be subject to recalls, the FTC is enabling them to promote that recalled and unrepaired pre-owned automobiles are safe and have been “repaired for safety,” Consumers for Auto Reliability and Safety stated.
The consent orders may reduce the standard for the industry in this type of marketing and are weaker than state laws, the group stated.
