CarMax allegedly failed to disclose vehicles had been recalled, settles with the FTC

By Mark Iandolo | Dec 29, 2016

WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC) announced Dec. 16 that CarMax Inc. and two other major used auto retailers have agreed to settle allegations of false advertising.


According to the FTC, CarMax alleged that it rigorously inspected cars, yet failed to adequately disclose that some cars were subject to un-repaired safety recalls. In television commercials, the company would allegedly tout its inspection process and only put a small message for three seconds at the bottom of the screen noting information about safety recalls.


Asbury, which also does business as Coggin Automotive Group and Crown Automotive Group, purportedly said, “Every Coggin certified used car or truck has undergone a 150-point bumper-to-bumper inspection by certified mechanics. We find and fix problems – from bulbs to brakes – before offering a vehicle for sale.” Asbury, however, allegedly failed to properly disclose that many of the cars had been recalled for safety issues.


West-Herr, the largest auto group in New York, allegedly made claims about vehicles being backed by the “West-Herr guarantee” and about “rigorous multi-point inspection with factory trained technicians.” The FTC argued that the company failed to properly disclose that many of the vehicles had been recalled for safety reasons.


All three companies have been barred from making these misrepresentations in the future. The FTC voted 3-0 to issue the administrative complaints against CarMax, Asbury and West-Herr and to accept the consent agreements. Each consent agreement will go before public comment for 30 days before being finalized.

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