General Motors Settles Federal Probe of Recalled Used Cars

General Motors has reached a settlement with the Federal Trade Commission (FTC) after an investigation into dealers who marketed used cars as safe to drive in spite of not completing repairs on recalled vehicles. According to a USA TODAY news report, FTC officials said GM and two dealer groups had independently agreed to stop marketing used vehicles as safe or describing vehicles as having been rigorously inspected when in fact the safety defects had not been fixed.

Recalled Vehicles Not Repaired

This particular investigation stemmed from the fallout of GM’s ignition-switch defect scandal, which has been blamed for at least 124 deaths after the automaker failed to fix the cars involved in the scandal. The commission also stated that it is pursuing actions against other automakers for engaging in a similar practice.

The FTC said GM and dealers advertised numerous cars including unrepaired vehicles affected by the ignition-switch defect under the “certified pre-owned” category. Even though, the commission is not slapping fines on GM, its director has said the automaker could be subject to fines if it violates the consent agreement.

Deceptive Advertising

Federal officials said GM boasted on its website that its used cars go through a 172-point inspection. In fact, their website stated: “We check it so you don’t have to.” Officials said this settlement would prevent some of the largest used-car advertisers in the country from luring consumers with such deceptive advertising. U.S. dealers are prohibited from selling new vehicles without repairing recalled vehicles.

However, they can still, under the law, sell used recalled cars without making the repairs. Under this agreement, the automaker is prevented from selling used unrepaired cars unless dealers disclose the facts to consumers. Despite these steps, we don’t know how many defective GM vehicles dealers sold nationwide.

Steps You Can Take

If you are in the market for a used car, be sure you check the Safercar.gov website to ensure that your vehicle has not been recalled. You can do this check by entering the vehicle identification number or VIN. If it is a recalled vehicle and the repairs have not been completed, do not buy it. If you must purchase the vehicle, insist that the dealer make the repair before selling you the vehicle.

These repairs are done at the manufacturer’s expense under the law. So you should not have to pay anything. Our California auto product liability lawyers have been vocal advocates for changing the law so that all vehicles – new or used – that leave the dealers’ lots should be repaired if they have been subject to a safety recall.