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TrueCar Responds to Claims in Mass Action Lawsuit

March 11, 2015

SANTA MONICA, Calif. — TrueCar has responded to a mass action lawsuit filed Tuesday by Bellavia Blatt & Crossett, calling the law firm’s claims that it violated unfair competition and deceptive trade practices laws “meritless.”

The lawsuit represents 117 dealerships that are either former TrueCar subscribers or have not used the third-party lead provider’s services. “It appears that these dealers responded to a website sponsored by that law firm encouraging dealers to join in bringing claims against TrueCar,” read a statement on the company’s website. “The lawsuit challenges the company’s advertising practices and asserts that we compete unfairly with non-TrueCar dealers. We believe the lawsuit is meritless.”

TrueCar currently serves 9,000 franchised dealers and 1,500 independent dealers across the U.S. — nearly double the number of dealerships it worked with just two years ago, officials said.

“Notably, no consumers are parties to the lawsuit,” the statement continued. “Consumers come to TrueCar because our platform provides real-time, upfront pricing information, and our certified dealers are committed to a better consumer experience.”

But Bellavia Blatt & Crossett’s senior partner, Leonard Bellavia, said the lead provider’s statement is “probative of nothing.”

“Well, I’m not a consumer lawyer,” he told F&I and Showroom. “I don't represent consumers, but on their behalf, dealers are suing because dealers are experiencing firsthand the discontent of consumers when they walk into their showrooms.”

The firm plans to file a second lawsuit in the coming weeks representing current TrueCar dealers. It claims that dealers have lost approximately 35 to 85 sales per year — or $432,000 to more than $1 million in revenue — due to TrueCar’s “no haggle” messaging, which the lawsuit alleges is false advertising.

“Simply because a dealer is using TrueCar does not mean that they are happy with the business practices of TrueCar,” Bellavia added.

The lead provider maintains that is in compliance with “all laws applicable to our business, including those referenced in this litigation.”

“We have invested substantial resources in our compliance efforts, and we have proactively engaged in dialogues about our business model with various regulatory authorities and dealer associations across the country,” the statement read, in part. “… We will defend the lawsuit, and our business practices vigorously and we expect to be fully vindicated.”

Comments

  1. 1. Jorge [ March 23, 2015 @ 12:10PM ]

    Don't get mad get even. Car Dealers can now turn the tables around on TrueCar. To learn more go to pricesetterautos.net

  2. 2. William James [ May 22, 2015 @ 02:46PM ]

    Truecar violates the basic vehicle code advertising laws that are designed to protect consumers in many ways. For starters, Truecar fails to disclose to consumers that dealers are paying Truecar a significant fee $299 to $399 per car, for the customer lead. Truecar also fails to disclose to the consumer that the only dealer pricing and so called savings that the consumer will see is from the dealers that are paying Truecar. Additionally they include Manufacturer rebates in their estimated savings calculation that are in fact not savings from MSRP but rebates that everyone will receive and are forbidden by law to be included in such savings estimates. Truecar is violating multiple CA vehicle code laws and are choosing not to obtain a dealer / broker license for the sole purpose of avoided scrutiny from regulators and having to abided by the laws that a licensed dealer / broker are held to uphold.

 

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