Safety Groups Sue Federal Trade Commission (FTC) for Allowing Dealers to Sell Cars with Uncompleted Recalls

The groups hope that a Commission consent order will be overturned

Safety Groups Sue Federal Trade Commission (FTC) for Allowing Dealers to Sell Cars with Uncompleted Recalls
Image: Pixabay
February 06, 2017

Vehicle safety groups are suing the Federal Trade Commission (FTC) in the hope of overturning a consent order allowing dealers and manufacturers to claim that "certified" vehicles are "safe" and have passed a "rigorous inspection" even when safety recall repairs have not been done.

"We're optimistic that the Court will rein in the FTC's dangerous and irresponsible abuse of its authority. Instead of protecting consumers, the FTC is protecting unscrupulous auto dealers who engage in false and deceptive advertising about the safety of the cars they offer for sale to the public. This is a serious threat to used car buyers, their families, and all who share the roads," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, which is one of the organizations suing the FTC.

The order set a de-facto standard for the auto industry allowing dealers to deceptively advertise vehicles, said the groups, that have dangerous and possibly fatal safety defects that have killed and maimed consumers.

"Even if there is a 100% certainty that an unrepaired safety recall defect will immediately kill anyone who buys a so-called 'certified' car and their family, the FTC would allow car dealers to advertise that car as 'safe' and 'repaired for safety,'" said Michael Brooks, acting director of the Center for Auto Safety. "Clearly the Court should intervene and force the FTC to reverse itself."

According to the groups, the order is already placing consumers at greater risk of injury or death.

"Until [the FTC entered into consent orders with GM, Lithia and Koons] every major car company had said that they forbade their dealers from selling certified used vehicles with any open recalls, including ones for Takata airbags. [But] with the FTC settlement for cover...Ford broke ranks, issuing an update to dealers on its 'enhanced' recall process and giving them permission to certify used vehicles that had open recalls after all," the groups allege.

Citing both the order and the election of Donald Trump to the presidency on an anti-regulation platform, the groups point out that AutoNation—which is the biggest new vehicle dealership chain in the country—reversed its policy of making sure that all used vehicles are fixed before they are sold to consumers. The chain now also lets its new car dealers sell unrepaired recalled vehicles, including those with Takata airbags that it is impossible to make safe due to severe repair part shortages.

The groups that have filed the suit include Consumers for Auto Reliability and Safety (CARS), the Center for Auto Safety, U.S. Public Interest Research Group (PIRG), MASSPIRG, CONNPIRG, and CALPIRG.

"Certified" vehicles are supposed to undergo rigorous inspections, and dealers and manufacturers charge, on average, roughly $1200 extra for them. Consumers are led to believe that not only have the vehicles been inspected, any significant problems have been fixed.