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.”