WASHINGTON—The Federal Trade Commission has taken action against online used car dealer Vroom, alleging the company has been “misrepresenting” that it thoroughly examined all vehicles before listing them for sale. The FTC further alleged the company has failed to obtain consumers’ consent to shipment delays or provide prompt refunds when cars weren’t delivered in the time Vroom promised.
The FTC said Texas-based Vroom has agreed to a proposed settlement that would require the company to pay $1 million to refund consumers harmed by the company’s conduct and prohibit the company from further misleading consumers and failing to provide required disclosures, the FTC said.
Violations Alleged
In its complaint against Vroom, the FTC alleges that the company failed to follow the Used Car Rule, the Pre-Sale Availability Rule and the Mail, Internet, and Telephone Order Rule (MITOR).
“Since 2019, Vroom has sold more than 170,000 vehicles to consumers through its website,” the FTC said. “ In its advertising, Vroom said that its cars underwent ‘multiple inspections’ to ensure they were in good condition in an effort to alleviate consumers’ concerns about buying a used car without being able to inspect it before purchasing. Vroom’s website even listed 184 points of inspection that were checked on every car they sold,” the FTC said.
“Consumer complaints about the company told a different story, according to the FTC’s complaint. “Numerous consumers complained about the condition of the cars they received from Vroom, with everything from loud grinding noises, bald tires, and worn brakes being reported.”
The complaint also notes that Vroom told consumers cars purchased from the company would be delivered in 14 days or less in its advertising and on its website.
Waits of Up to Three Months
“Despite making this clear statement, when it couldn’t meet that delivery timeline, Vroom regularly failed to give consumers the chance to either consent to a longer delivery timeline or cancel their purchase and receive a prompt refund, as required by MITOR,” FTC said. “The complaint cites instances where consumers have had to wait as much as three months or longer before their car arrived.”
As a used car dealer, Vroom also is required to follow the FTC’s Used Car Rule, which includes a requirement that the dealer properly complete and display a “Buyers Guide” on each used car it offers for sale.