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FTC Asked to Investigate CarMax

Tina Robinson2 years ago

Consumer groups have petitioned the Federal Trade Commission (FTC) to investigate claims by used-car dealer CarMax that its vehicles have been thoroughly tested for quality. According to the New York Times, the groups are concerned that CarMax is misleading consumers because the dealer does not make repairs to vehicles with open recalls before selling them.

More about the FTC Petition

Ads for CarMax, the largest used-car dealer in the U.S., claim their vehicles undergo a “rigorous 125-point inspection” before being offered up for sale. However, a petition filed by 11 consumer groups on Monday, notes that CarMax does not check for open recalls on its vehicles. Included in the groups signing the petition are:

  • Consumers for Auto Reliability
  • Consumers Union
  • Consumer Federation of America
  • Center for Auto Safety
  • National Consumer Law Center
  • U.S. Public Interest Research Group

The petition claims that CarMax’s advertising is deceptive and misleads customers.

Also endorsing the petition was Sen. Charles E. Schumer (D-N.Y.). In a letter supporting the petition, Schumer wrote, “It is bad enough that used-car dealers are not required by law to fix a safety recall problem prior to selling the recalled vehicle to a consumer. Compounding the safety risks with misleading and deceptive advertising and sales practices only further endangers the safety of used-car customers and everyone who shares the roads.”

Used-Car Dealers Not Required to Repair Recalls

Under current law, only new-car dealers are required to repair vehicles with open recalls before sales. A recently proposed bill seeks to give the National Highway Traffic Safety Administration (NHTSA) the authority to require used-car dealers to repair recalled vehicles, but until that bill is passed, those dealers are under no legal obligation.

An e-mail in response to the petition from a CarMax spokesman said, “CarMax provides the necessary information for customers to register their vehicle with the manufacturer to determine if it has an open recall and be notified about future recall.” CarMax also noted that it did not have the authority to make recall repairs at its facilities.

However, because recalls are done at no cost to the owner, it would be easy to take the vehicle to a franchised dealer and have the repairs completed. 

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