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Calif. Dealer Group Amends Lawsuit Against TrueCar

January 06, 2016

SACRAMENTO, Calif. — The California New Car Dealers Association has amended its May 2015 lawsuit against TrueCar. The modification asks the court to declare that the Santa Monica-based vehicle-buying site continues to  be in noncompliance with California Vehicle Code sections requiring vehicle dealer and auto broker licensure.

The amendment also alleges that TrueCar violates state and federal advertising laws with the “no surprise or hidden fees” promise it includes in its advertisements. The association claims the car-buying site fails to disclose to consumers that it receives a fee on each sale made through its website.

“TrueCar actually matches a buyer and a seller and gets paid for doing so,” said CNCDA President Brian Maas in the association's Jan. 5 press release. “This is brokering and TrueCar isn’t licensed as such.”

When the lawsuit was originally filed, TrueCar responded by saying that the California Legislative Counsel Bureau had previously determined that the operation of a web-based service such as TrueCar does not constitute autobrokering or operating as a dealer.

TrueCar continues to claim that they operate differently than traditional auto dealers. However, Patricia Glaser, trial attorney for Glaser Weil, the law firm that filed the litigation against TrueCar, the firm's business model "simply doesn't meet the legal structure in place to protect consumers."

“TrueCar must follow the law like the rest of us,” Glaser added.

On Dec. 23 2015, Brian Kabateck, president of the Consumer Attorneys of California, also filed a lawsuit against TrueCar on behalf of class action plaintiff who used the TrueCar network and a guaranteed savings certificate to purchase a vehicle. The lawsuit claimed that TrueCar should have been licensed as a dealer and an auto broker. Additionally, because the fee paid to TrueCar was not disclosed, TrueCar was unjustly enriched by the dealers who paid it, the complaint claims.

Comments

  1. 1. Jerry Korum [ January 07, 2016 @ 01:26PM ]

    Any New Vehicle Auto Dealer that would ever sign up with True Car is just not thinking! True Car advertises making all of us Dealers look like greedy incompetent fools. True Car is an enemy not a friend of the great Automobile Dealers of America!

  2. 2. Neil Evans [ January 12, 2016 @ 11:30AM ]

    Just as Carfax is an enemy of dealerships...but dealers continue to feed them. I just don't get it!

  3. 3. Hillary [ March 05, 2016 @ 06:12PM ]

    "Protect Consumers", Huhh?

    Notice the consumers are NOT the ones filing the suit. And why did they change their claim.... Just keep filing claims, somethings gotta stick.

    I really appreciate truecar. I am able to learn about various aspects of cars and their prices. Possibly if they are required to become a broker (just like the rest) with direct internet sales from manufacturer to customer, does that mean that instead of supplying the information the customer really wants there will be 50 popups asking various questions, rather then just giving the customer the information they are looking for (just like the rest).

 

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