Consumer Groups Claim That CarMax’s Ads Are Deceptive

Urge F.T.C. to investigate

A coalition of 11 consumer groups is calling on the Federal Trade Commision to investigate CarMax for using deceptive advertising, writes Chistopher Jensen for The New York Times.

The groups claim that CarMax "does not fix vehicles that have been recalled before it sells them," despite promises in their ads that the vehicles have all undergone a "rigorous 125-point" inspection. Silver + Partners in New York is CarMax's lead creative agency.

According to The New York Times, the complainants include the 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. "It is inherently deceptive for an auto dealer to represent that its vehicles have passed a rigorous inspection, while failing to take even the most basic step of checking the vehicle’s safety recall status," they wrote in a petition filed this week. 

Supporting the petition is Senator Charles E. Schumer of New York (Democrat). "It is bad enough that used-car dealers are not required by law to fix a safety recall problem prior to selling the recalled vehicle to a consumer," Schumer wrote in a letter sent to the F.T.C. on Monday. "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."

A CarMax spokesman, Casey Werderman, noted that the company "provides 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," adding that "automakers did not give retailers like CarMax the authority to carry out recalls at their facilities, but that CarMax would like to see legislation that would make that possible." The New York Times goes on to report that, according to several automakers, used-car dealers can "take a recalled vehicle to a franchised dealer and have the recall performed there without charge." 

The claim against CarMax comes amid the disclosure that General Motors delayed the recall of millions of vehicles for over ten years, for which the company is now facing investigation in a House Energy and Commerce subcommittee, which has brought increased scrutiny to the recall process by legislators and consumer advocates. While the National Highway Traffic Safety Administration requires sellers of new cars to fix recalled vehicles, the agency lacks the authority to require used-car dealers carry out the same repairs. According to The New York Times, the agency is seeking to gain such authority from Congress. The current claims against CarMax could prove to have an impact on that decision.