CarMax settles claims over selling practices for $1M
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CarMax in Westborough
CarMax Auto Superstores, Inc., which has a location in Westborough, reached a multistate settlement of $1 million following an investigation into the company’s selling practices by a coalition of state attorneys general, including Massachusetts’ Maura Healey.
Massachusetts will receive $21,000 in the settlement, according to the announcement from Healey’s office on Thursday.
The investigation claims CarMax, which has a location on Route 9 in Westborough, sold used vehicles with open recalls, despite claiming to sell safe vehicles. CarMax is headquartered in Virginia.
Healey and the other attorneys general allege CarMax took part in deceptive advertising by telling consumers it reports and inspects cars until deemed safe, but CarMax allowed the sale of vehicles with open recalls related to their safety without proper inspection, and without disclosures to buyers.
“Buying a vehicle is a significant financial expense for many families and individuals, and they need to be sure that the car they are purchasing is both operational and safe,” Healey said in a written statement. “Under this industry-changing settlement, CarMax will pay for its practices and be required to make important safety disclosures to consumers shopping for cars.”
Federal statutes prohibit the sale of new vehicles with open recalls, but there is no similar statutory prohibition selling used vehicles with open recalls. This settlement establishes precedent requiring used car dealers disclose open safety recalls to consumers before they buy. CarMax will present buyers with copies of any open recalls and get the signature of the buyer on a standalone disclosure document before presenting any other sales paperwork. CarMax will include hyperlinks for vehicles advertised online and QR codes for vehicles on the lot that link directly to any open recalls on the vehicle.
“CarMax led the industry in recall transparency by sharing vehicle specific recall information in-store and online to ensure our customers know about open recalls prior to purchase. In fact, as soon as NHTSA made available vehicle specific recall information in 2014, we began providing the information to customers nationwide and we continue to do so today. As CarMax is not authorized by manufacturers to complete recall repairs and close out recalls, we work hard to ensure our customers have the information they need to take action and have recalls repaired at a manufacturer-authorized facility,” Joe Wilson, COO of CarMax, said in a statement.
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