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CarMax Settles Federal Charges of Selling GM Cars without Disclosing Ignition Defects

Monday, March 13, 2017By Richard Alexander

If you have ever had a car that was subject to a safety recall, you probably know how easy it is to go online and learn about it. Yet CarMax, one of the major used car retailers in the nation, doesn’t bother to address pending recalls before it sells a car. For unwary buyers of certain General Motors vehicles equipped with a recalled ignition switch, that could be fatal.

The GM switch problem has been deemed by safercar.gov as a “serious safety issue that should be addressed immediately." The faulty switches may cause a vehicle engine to shut off while driving, when the ignition switch backtracks from “on” to “accessory” for no apparent reason. This causes the power steering, power brakes, airbags, and automatic restraints to be inoperable.

One would think that a seller of used cars would be tuned into the world of safety recalls and make sure the vehicles offered have been brought up to date before being offered for sale. CarMax, despite an advertising campaign that touts its “125+ Point Inspection,” addressed recalls by nothing more than providing an innocuous statement that some of its vehicles may be subject to safety recalls.

The Federal Trade Commission (FTC) took issue with the company’s approach and brought charges to force a change in its practices. The FTC focused on CarMax’s advertising materials that claim the 125+ point inspection as well as that, on average, its cars go through “12 hours of renewing sandwiched between two meticulous inspections.” The charges also pointed out that CarMax’s television commercial extolling its team inspection and reconditioning efforts contains a small message that appears for three seconds stating that its cars may be subject to recalls.

CarMax ultimately entered into an agreement with the FTC that prohibits the company from doing the following things:

  • Claiming its vehicles to be safe, or that it has otherwise screened vehicles for or repaired safety problems, unless the vehicles are not subject to a safety recall, or in the alternative, it clearly and conspicuously states that its vehicles may be subject to a recall and provides information to buyers about how to determine whether there are pending recalls.
  • Misrepresenting whether or not there are pending recalls for any given vehicle.

The agreement also requires CarMax to notify those customers who bought vehicles after July1, 2013 that their vehicles may be subject to recalls.

It is hard to imagine that a major retailer of used vehicles would pass the ticking time bomb that is the faulty GM switch on to unsuspecting customers. If you or a loved one has been badly injured in a crash, contact the personal injury lawyers at the Alexander Law Group, LLP or call 888.777.1776. All calls are free and confidential.

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