Consumer Groups Ask FTC to Investigate CarMax

New York TimesJune 28, 2014 

Saying that advertisements by CarMax, the nation's largest used-car retailer, are deceptive, a coalition of 11 consumer groups has asked the Federal Trade Commission to investigate. The groups say CarMax does not fix vehicles that have been recalled before it sells them, even though the retailer's ads promise that the vehicles have undergone a rigorous quality inspection.

"It is inherently deceptive for an auto dealer to represent that its vehicles have passed a rigorous inspection, while failing to take even the most basic step of checking the vehicle's safety recall status," said the petition filed Monday by the consumer groups, including the Consumers for Auto Reliability and Safety, Consumers Union, the Consumer Federation of America, the Center for Auto Safety, the National Consumer Law Center and the U.S. Public Interest Research Group.

"Consumers may think they're buying a safe used car, but if CarMax isn't making sure that recalled cars are fixed, consumers are being misled," Ami Gadhia, senior policy counsel for Consumers Union, wrote in an email. "That's a problem, and one we hope the FTC and CarMax can rectify."

The action comes amid increased focus and dismay on the part of consumer advocates and legislators over the adequacy of the recall process intended to protect motorists.

In response to the filing of the petition, a CarMax spokesman, Casey Werderman, wrote in an email that "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 recalls." Werderman also said that automakers did not give retailers like CarMax the authority to carry out recalls at their facilities, but that CarMax would like to see legislation that would make that possible.

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