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Used Car Retailer Carmax Reaches Settlement With 36 States Over Informing Customers About Needed Recall Repairs

A multiyear, multistate investigation into Carmax started after authorities learned some consumers may not have been aware of unrepaired and potentially serious safety recalls in used vehicles purchased from the popular retailer.

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A major used car seller in the United States has reached a settlement with 36 state Attorneys General, including Illinois, after authorities accused the company of selling some cars that may have had potentially serious safety risks inside.

The multiyear investigation into used car retailer Carmax dates back several years, as well as the allegations, which the company insists it has already addressed.

This month, the coalition of Attorneys General announced Carmax agreed to pay a $1 million fine, split among all 36 states involved, as well as ensure changes to its business plan after state authorities accused the company of “failing to disclose open safety recalls on used vehicles to consumers before sales.”

Airbags, brakes, fuel pumps and other critical safety parts were subject to recalls on its vehicles, yet state authorities alleged buyers rolled off the Carmax lot none the wiser. 

Among its findings issued in relation to the fine, the Attorneys General said Carmax “misled consumers” and classified vehicles-for-sale as “safe” despite there being open recalls.

Illinois Attorney General Kwame Raoul reacted to the settlement writing, “Consumers deserve to know if a vehicle they are considering purchasing has an unrepaired recall that could jeopardize their safety and the safety of the motoring public.”

It’s not the first time Carmax has faced these claims.

Back in 2016, the Federal Trade Commission also accused Carmax of “failing to disclose unrepaired safety recalls,” despite the company touting rigorous inspection processes on all of its vehicles via print and television advertisements.  

The FTC alleged Carmax, “regularly advertised vehicles subject to open recalls for defects that can cause serious injury.”

Carmax also settled those charges, and was not required to pay any fines, the company said back in 2016, but among the settlement’s conditions, the company was prohibited from making safety claims about its vehicles, unless they are free of defects. There is no indication Carmax breached that settlement.

As part of this most recent settlement, Carmax agreed to post QR codes for vehicles on its sales lots, linking directly to recall information, as well as present buyers with hard copies of recall notices before a customer signs a contract. 

Carmax has responded to the AG’s settlement, telling NBC 5 Responds, “CarMax has been disclosing open recalls on a vehicle-specific basis since November 2014, and has been negotiating this current multi-state settlement with the Attorneys General since that same time period.”

“The settlement terms are consistent with CarMax’s long standing, not new, practices,” a Carmax spokesperson wrote by email.

To read Carmax’s full statement about the recent settlement, click here.

Does Your Vehicle Have An Open Recall?

Whether you’re buying a used car from Carmax, or any used car seller, there’s a convenient and easy way to find out if there are any open safety recalls needing repairs.

All you need is a phone, and the vehicle’s VIN, usually located on the driver’s side windshield corner or door.

The National Highway Traffic Safety Administration has a tool to search any vehicle’s VIN for recalls.

To use the NHTSA tool, click here.

Have a consumer complaint? Call 1-844-NBC-RESP or click here to let us know, so we can help.

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