Some major car dealers are selling used cars that have been recalled because of unsafe, unrepaired defects to consumers without their knowledge. Dealers have entered into settlements with federal regulators who allow them to market these unsafe vehicles as safe.
Federal Trade Commission Settlement
In 2016, the Federal Trade Commission (FTC) alleged that General Motors and CarMax dealers violated the Federal Trade Commission’s policies on unfair and deceptive business practices by selling open recall vehicles. Although dealers advertised Certified Pre-Owned vehicles that had undergone rigorous safety inspections and repairs by trained auto mechanics, the FTC discovered that many vehicles were still under recall and unsafe to drive, resulting in accidents and injuries seen by auto accident attorneys around the country.
To resolve the situation the FTC proposed a settlement with dealers who were found guilty of these sales tactics. The settlement required dealers to abide by one of two options – stop marketing recalled used vehicles as safe, or continue marketing them as safe, but with clear disclosures on safety issues to consumers. The FTC settlement required all car dealers to disclose safety concerns and necessary repairs on used cars prior to sale.
The FTC settlement was opposed by some lawmakers and safety advocates, but it was accepted by General Motors and CarMax, one of the country’s most well-known used car dealers. CarMax routinely advertised carefully inspected and reconditioned used vehicles for sale, but never mentioned that cars on their lots had been recalled for safety concerns. In 2014, a CarMax investigation by the FTC revealed that the car dealer was violating the Federal Trade Commission Act by using deceptive sales tactics and false advertising. The investigation showed that 27 percent used cars for sale at eight CarMax locations had open safety recalls for unrepaired safety defects.
In contrast to General Motors and CarMax, AutoNation, another major dealer of pre-owned vehicles, stopped the sale of cars equipped with potentially dangerous Takata airbags. Recently, the company announced that it plans to remove all vehicles with open safety recalls from its 293 franchises across the country. AutoNation stated that affected vehicles will be identified with “Not for Sale” tags and physically removed from inventory until adequate repairs are made.
To prevent accidents, the FTC urges consumers who are interested in purchasing used vehicles to check the National Highway Traffic Safety Administration’s recall list prior to making a purchase. By using the website’s recall lookup tool, consumers can input the vehicle’s VIN located in the left corner of the vehicle’s dashboard. If the vehicle is on the recall list, consumers are urged to make sure that vehicle repairs are made by a qualified mechanic and the vehicle is safe to drive.
Accidents and Injuries From Recalled Vehicles
In 1966, the National Traffic and Motor Vehicle Safety Act was established to promote vehicle safety and prevent accidents and injuries. The Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) was given the authority to issue vehicle safety standards and to require manufacturers to recall vehicles that have safety-related defects. Since 1966, close to 400 million vehicles have been recalled. While many manufacturers voluntarily initiate recalls on unsafe vehicles, others are ordered to initiate recalls by NHTSA investigations. When a safety defect is discovered in a vehicle, NHTSA must be notified by the manufacturer, and the manufacturer must also notify vehicle dealers, distributors, and owners. The manufacturer is required to repair the problems at no charge to the owner. NHTSA is responsible for monitoring the manufacturer’s actions to properly correct defects and ensure vehicle safety.
Federal Motor Vehicle Safety Standards set minimum performance requirements for parts of a motor vehicle that affect safe operation including:
- Braking Systems
- Steering Columns
- Wheels and Tires
- Headlights and Taillights
- Air Bags
- Safety Restraints and Child Car Seats
Federal safety standards apply to all vehicles and vehicle-related equipment manufactured or imported for sale in the United States, and certified for use on public roads and highways. Vehicle safety standards are put in place to protect consumers against unreasonable risk of accidents that result from defects in vehicle construction, design, and performance. In general, a vehicle safety defect is defined as a problem that exists in a motor vehicle and creates a risk to motor vehicle safety. It may exist in a group of vehicles of the same model or design, or in-vehicle equipment within the vehicle of the same type and manufacture.
NHTSA operates a Vehicle Safety Hotline telephone service, so consumers can report vehicle safety concerns. Consumers who suspect safety-related defects can call the hotline to report problems and file complaints. If the agency receives similar reports from a number of people about the same product, it will launch an investigation that may result in recalls if safety defects are found.