CarMax to Pay $1M to Settle Multistate Recall-Disclosure Probe
36 states alleged the used-car retailer sold cars with open safety recalls without letting buyers know.

The probe began in 2014, and since that year, CarMax said in a press release about the settlement that it has disclosed safety recalls in its sales process and online ads.
IMAGE: CarMax
CarMax agreed to pay $1 million to settle claims by 36 states that it sold cars without disclosing open safety recalls.
The states alleged that CarMax engaged in deceptive advertising by telling consumers its cars were safe due to its reporting and inspecting practices, though it sold cars with open safety recalls without proper inspection or disclosures to buyers.
The settlement establishes legal precedent for a requirement that used car dealers must disclose open safety recalls to consumers before selling them, said the Massachusetts attorney general’s office in a statement about the settlement. Heretofore, only new cars were required to be sold with such notice by federal law.
The Virginia-based company, the biggest used-car retailer in the U.S., agreed as part of the settlement to give car buyers copies of any open recalls on the vehicles they’re considering purchasing before presenting other sales paperwork. It must also provide to shoppers hyperlinks for vehicles advertised online and QR codes for those sold on lots that link to open recalls.
“Consumers deserve to know if a vehicle they are considering purchasing has an unrepaired recall that could jeopardize their safety and the safety of the motoring public,” said Illinois Attorney General Kwame Raoul, who led the CarMax probe, in a press release.
The investigation began in 2014, and since that year, CarMax said in a press release about the settlement that it has disclosed safety recalls in its sales process and online ads. “The settlement terms are consistent with CarMax’s longstanding practices,” it said.
Originally posted on Auto Dealer Today
More Compliance

Dueling Banjos in the Car Biz
Reports and accounts at variance show auto dealers’ trust profiles have risen in many consumers’ minds but that there remains a need for greater transparency by some.
Read More →
NADA and the Miracle on 34th Street
Automotive dealers should follow the National Automobile Dealers Association's consumer-friendly guidelines in order to minimize their legal risks.
Read More →
Another Look at a Recent Data Breach
Get caught up on the most pressing legal and regulatory matters facing dealers and F&I professionals, including data security, shotgun purchases, and inconsistent payment quotes.
Read More →

The Best Thing a Dealer Can Do to Avoid Legal Problems
Citing the issue is a strategy borrowed from the legal field itself.
Read More →
Fines of the Times
Civil penalties for noncompliance with federal auto retail and finance rules and regulations can add up quickly. Use this checklist to cover your bases.
Read More →
Goodwill and Car Dealers
A dealer goodwill tale is a cautionary tale worth paying attention to.
Read More →
The Regulatory Empire Is Striking Back
President Trump - entropist and corporate disruptor in consumer law
Read More →
How to Clear a Red Flag
Refine and enforce your dealership’s FTC-mandated ID theft-prevention program to ensure no transaction goes awry.
Read More →
