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Consumer Groups Push CarMax To Be Upfront About Recalls

Deceptive advertisements could place drivers in danger, critics say

In advertisements that help sell thousands of used cars, CarMax says it pays "rigorous" attention to safety details and checks the road-readiness of each car with a meticulous 125-point inspection prior to sale.

There's one big item missing on that checklist, say numerous consumer groups.

CarMax does not verify whether defects announced in safety recalls have actually been fixed. Nor does the company, which operates more than 100 outlets across the country, check to see if cars have been recalled at all. Perhaps most importantly, it doesn't relay this lack of information to car shoppers, who might otherwise believe, based on the company's advertising, that recall-related safety problems have been detected and repaired.

A coalition of 11 consumer groups recently filed a petition with the Federal Trade Commission that asks the agency to investigate CarMax for its advertising practices.

"It is inherently deceptive for an auto dealer to represent that its vehicles have passed a rigorous inspection, while failing to take even the most basic step of checking the vehicle's safety recall status in order to identify known safety defects," the group's petition says.

The petition comes amid heightened scrutiny of defective vehicles and the methods used to alert consumers to potentially deadly problems. Automakers have recalled more than 40 million vehicles so far in 2014, already an annual record.

Car dealerships must fix new cars if they are recalled before being sold, per National Highway Traffic Safety Administration rules. But there are no such requirements for used cars. Many safety advocates, including Sen. Chuck Schumer (D-N.Y.) may seek legislation to end that discrepancy.

An FTC spokesperson confirmed the agency has received the petition, but cannot say whether it will prompt an investigation, nor whether consumer complaints about CarMax had been received via its consumer sentinel network. The Better Business Bureau had received 802 overall complaints about CarMax over the past three years, including 129 related to "advertising/sales."

Consumers left on their own

For its part, CarMax encourages customers to register their vehicles with manufacturers upon making a purchase to get timely information on open and new recalls.

In a written statement, a spokesperson for the Richmond, Va.-based CarMax said the company is hamstrung by a recall system that favors existing relationships between manufacturers and their own dealerships. Automakers, it said, do not give CarMax or other third-party repair shops the authority to complete recall repairs.

"CarMax operates within the limitations of this system, encouraging our customers to register their vehicles with the manufacturer," the statement said. It noted the company has supported previous attempts at federal legislation that would give third parties an opportunity to provide recall-related repairs, though when asked for specifics on its legislative support, the company did not cite any examples.

Customers say CarMax's inability to fix recalled cars shouldn't preclude the company from alerting them to open recalls on the vehicles they buy.

Consequences from lack of information

One customer, Pam Gentilini from Houston, Texas, endured repeated problems with wiring in the taillights and turn signals of her BMW. She took her car back to CarMax multiple times and paid for repairs out of her own pocket – only to later find out the flaws were covered under an open recall.

Another customer, Angela Davidson, bought a 2010 Dodge Ram from a CarMax in Irvine, Calif., on May 19. She used the CarMax outlet, in part, because the company touted its thorough, 125-point inspection process. When Davidson later called Chrysler to help troubleshoot a Bluetooth connection problem, she was astounded to learn the truck had been recalled more than a year earlier for a rear-axle problem that could "cause a crash without warning," according to Chrysler's recall documents. No repairs had been made on her truck.

"Their attitude is, 'We're car dealers, we want to sell it, and if it's not safe, too bad,'" said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. "They have said they can't tell whether a car is under recall. At the same time, they say it's up to the consumer to find out. Which really doesn't make sense. If they can't tell, how are you supposed to find out?"

In its statement, CarMax says that, "because there is no national individualized recall database and notices are only sent to registered owners," that customers are in a better position to learn about recalls and seek repairs.

On its website, NHTSA maintains a database where motorists can search for recall information on specific makes and models from dozens of manufacturers. A CarMax spokesperson did not return a request for comment when asked why the company did not consider this a national database, though it may soon be a moot point.

New database a turning point?

Next month, a federal rule that requires almost all auto manufacturers to provide recall data on their websites, searchable by Vehicle Identification Numbers (VINs) and updated at least every seven days goes into effect. It will be another tool for consumers seeking recall information.

CarMax did not say whether it would change its inspection procedures or relay this information to customers once data becomes available by this method.

The FTC petition was signed by: Consumers for Auto Reliability and Safety, Center for Auto Safety, Consumer Action, Consumer Federation of America, Consumers Union, Courage Campaign, National Association of Consumer Advocates, National Consumer Law Center, National Consumers League, Trauma Foundation and U.S. Public Interest Research Group.

It arrives at a time that the FTC is cracking down on deceptive auto-related advertising. Earlier this year, the agency brought charges against ten dealerships in six U.S. states for ads that misrepresented costs of cars, lease details and financing terms. Now consumer groups hope the FTC will pursue CarMax with similar vigor.

"If you bought this car from someone on the street, you'd say, 'I really need to check this car out,'" Shahan said. "You'd get a CarFax, which would show when a vehicle is under recall. You might even enter the VIN on a manufacturer's website. With CarMax, they're saying, 'We've already checked it out for you.' They're saying they're worry-free, hassle-free. It gives people a false sense of security, and that is so irresponsible."

Pete Bigelow is an associate editor at AOL Autos. He can be reached via email at and followed on Twitter @PeterCBigelow.

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