June 24, 2014 at 7:01 pm

Safety groups urge FTC to halt CarMax advertising over unrepaired recalled vehicles

Washington— A dozen auto safety and consumer groups asked the Federal Trade Commission to stop the nation’s largest used-car seller, CarMax Inc., from advertising its vehicles as rigorously inspected when it fails to complete recall repairs before selling the vehicles.

The petition filed with the FTC on Monday and backed by Sen. Charles Schumer, D-N.Y., comes as groups step up pressure on Congress to change the law to force dealers to fix recalled vehicles before selling them. A separate measure is pending to force rental car companies to repair recalled vehicles before lending them.

“CarMax is playing recalled used car roulette with its customers’ lives,” said Rosemary Shahan, president of California-based Consumers for Auto Reliability and Safety, which spearheaded the petition. Other groups signing include Consumers Union (the parent company of Consumer Reports), the Center for Auto Safety, the Consumer Federation of America, U.S. Public Interest Research Group and National Consumers League.

At issue in the FTC petition is the company’s advertising as “CarMax Quality Certified” with a rigorous “125+ point inspection.” The four-page petition calls it “inherently deceptive” to tell customers that vehicles have passed a rigorous safety inspection, “while failing to take even the most basic step of checking the vehicle’s safety recall status.”

The FTC petition says: “There is absolutely no excuse for CarMax or other auto dealers not to ensure that the used vehicles they sell to consumers are not ticking time-bomb cars with unrepaired safety recalls.”

“Car dealers shouldn’t sell used cars that have a safety recall to consumers, period. Far too many times we have seen the tragic and often fatal consequences when deficient cars are allowed on the road, and it’s time for the FTC to do everything it can to put a stop to it,” Schumer said.

CarMax spokesman Casey Werderman noted that automakers “do not give used car retailers, including CarMax, the authority to complete recall repairs.”

Federal law already prohibits auto dealers from selling new cars that are under a safety recall. California legislators have considered, but failed to pass this month, legislation to prohibit car dealers from selling recalled used cars to consumers unless the recall repairs have been performed. Most major automakers require dealers to repair used recalled vehicles before selling them. A lawyer for CarMax sent a letter to legislators opposing the bill, noting the company has 16 stores in California.

Werderman said CarMax tells prospective owners how to register a vehicle with the manufacturer “to determine if it has an open recall and be notified about future recalls.”

He said the company supports federal legislation that requires used car retailers to fix recalls, so long as it also requires manufacturers to fully enable used car retailers to make the repairs.

“The legislation should require manufacturers give used car retailers all recall notices, the same diagnostic and repair information, and the tools and parts that manufacturers make available to their franchise dealers,” Werderman said.

CarMax has more than 100 stores in 40 markets across the United States and has sold more than 5 million vehicles.