There are a few highs and lows for the largest used car retailer in the US. Sales volumes are up and stores continue to open, but that also means being a more visible target for watchdog groups and government agencies. CarMax has become the target of likely investigation by the Federal Trade Commission (FTC) over deceptive advertising. This push comes from a coalition of 11 consumer groups who think CarMax is not fixing recalled cars before selling them. Here’s a few key points from the media coverage:
- The 11 consumer groups say that CarMax has been deceptive – it’s ads claim to that the retailer has rigorously inspected quality and safety of its used cars but some of them are still affected by the problems that got the vehicles recalled in the first place.
- The petition filing is getting a lot of notoriety and being taken seriously, as it was coordinated by a few credible organizations – 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.
- The petition also has the support of Senator Charles Schumer (D-New York). “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,” he wrote.
- GM’s massive recall has given more attention to this FTC filing against CarMax. The way that it’s being carried out by consumer groups also raises the question of how much say dealers should have in the recall process.
- Casey Werderman, a CarMax spokesman wrote in an email that CarMax does provide “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 stated that CarMax would like to see legislation making it possible for retailers to have the authority to carry out recalls at their facilities, a choice which is only being made by the automaker.
