FTC cracks down on GM, auto dealers over recalled cars

Monday, February 01, 2016

The Federal Trade Commission (FTC) has charged General Motors (GM) and two of the largest auto dealers in the country with deceptive advertising for failing to disclose that some of the used cars they were selling to consumers were subject to safety recalls that remained unrepaired.

Safety problems with the used cars could include ignition switch defects that can impair steering, braking and airbag deployment. In addition, alternator defects can cause electrical fires and unexpected car shutdowns.

According to the FTC, GM and auto dealers Jim Koons Management (in the Mid-Atlantic) and Lithia Motors (in the West and Mid-West) advertised that the recalled cars had undergone rigorous safety inspections, without revealing the safety defect recalls.

The FTC said these auto giants will no longer be able to claim their used vehicles are safe or have passed rigorous inspection unless “they are free of unrepaired safety recalls, or unless the companies clearly disclose the existence of the recalls in close proximity to the inspection claims.”

The FTC has ordered the companies to contact recent used car buyers to notify them that a safety recall may be pending on their vehicle.

The FTC consent order requires that consumers be notified of unrepaired safety recalls but it does not dictate that auto companies must repair the automobiles prior to selling them.
 

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