It's not illegal to sell a used vehicle with an open recall. However, the consumer protection agencies contend that CarMax's advertising gives customers a false sense of safety from their purchase due to assertions that each model goes through a 125-point inspection. Some of the pending campaigns that this study found included the potential for fires, airbags not deploying, and brake problems.
Last year, consumer groups began lobbying the Federal Trade Commission to do something about this alleged false advertising, and US Senator Charles Schumer was also on board. Eventually, 11 customer protection agencies filed similar petitions. The FTC said that it received over 1,500 complaints from people against CarMax and another 802 from the Better Business Bureau.
CarMax contends that dealers are loathe to make recall repairs on used vehicles that they aren't selling. "We have found that dealerships are often more likely to provide timely recall repair to customers rather than to a competitor, like CarMax," the company said in a statement, according to Automotive News. The business allegedly has a policy to provide the list of open safety campaigns from the National Highway Traffic Safety Administration to buyers, and CarMax's homepage has a link to NHTSA's VIN search tool.
The entire study from the CARS Foundation and CALPIRG can be viewed in PDF format, here.