Miller, other AGs announce settlement with CarMax over recall disclosures

CarMax must provide information on unrepaired recalls before finalizing purchases

Iowa Attorney General Tom Miller
Iowa Attorney General Tom Miller. CBJ FILE PHOTO

Iowa Attorney General Tom Miller has announced a $1 million multistate settlement with CarMax Auto Superstores, Inc., and 35 attorneys general that will require CarMax to disclose unrepaired recalls related to the safety of its used vehicles before consumers buy.

“When buying a vehicle, Iowans have the expectation they are receiving reliable and accurate information from the dealer, especially when it comes to the safety of the vehicle,” Mr. Miller said in a news release Dec. 1. “With this settlement, CarMax customers can know that they have complete information about any safety recalls that apply to their vehicle.”

Iowa will receive roughly $20,589 as part of the settlement, and CarMax cooperated fully with the investigation, according to the release.

In 2014, a group of attorneys general began looking into the sale of vehicles with open recalls amid concerns that consumers were not aware of unrepaired and potentially serious safety recalls in purchased used vehicles. While federal law prohibits the sale of new vehicles with open recalls, no such standards existed for the sale of used vehicles with open recalls. The group’s goal was to create industry standards on this issue and strengthen consumer protections.

In the course of the investigation, the group alleged that CarMax omitted or misrepresented the recall status of some vehicles sold to consumers.

The settlement establishes that used car dealers should generally disclose open safety recalls to consumers before they buy. Specifically, CarMax will now include hyperlinks for vehicles advertised online and QR codes for vehicles on the lot that link directly to any open recalls on the vehicle, so consumers can access this data as they shop.

CarMax will also present the consumer with copies of any open recalls and obtain the consumer’s signature on that standalone disclosure document before presenting any other sales paperwork. Additionally, CarMax agrees to not represent vehicles as “safe.”

CarMax will continue to use the National Highway Traffic and Safety Administration’s (NHTSA) vehicle identification number tool to provide safety information to consumers.

Consumers can also use the NHTSA tool to check for any open recalls on their vehicles.