GM settles FTC probe into sale of recalled used cars


MIAMI – The Federal Trade Commission had said General Motors and two dealers ran used car inspection ads that failed to adequately disclose unrepaired safety recalls.

The FTC announced Thursday that General Motors Company, Jim Koons Management and Lithia Motors, Inc. agreed to settle separate FTC administrative complaints involving allegations that they sold preowned cars with open safety recalls despite touting how rigorously they inspect their cars.

With over 100 stores in the West and Midwest, they are the two of the nation's largest used car dealers.

"Safety is one of the biggest considerations for consumers shopping for a car," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "So companies touting the comprehensiveness of their vehicle inspections need to be straight with consumers about safety-related recalls, which can raise major safety concerns."

"Call Christina" has brought you a series of reports regarding the importance of checking for unrepaired recalls on used cars.

Related: Free, easy way to find unrepaired recalls on used vehicles

"We know that there was more than 300,000 used cars bought and sold here in Florida with an unfixed recall [in 2014]," said Chris Basso of CARFAX.

There's no law prohibiting car dealers from selling recalled used cars to consumers. U.S. Sen. Bill Nelson (D-Fla.) is looking to change that. He wants dealerships to be required to fix a recall on a used car just as they are required to do for new car purchases.

Nelson has tried to make this happen before but the legislative amendment was defeated last year.

You can look up a recall by VIN. CARFAX also has an free app.

If you're in the market to buy a used car, check out Local 10 News' "Call Christina" used car buying tips:

Related: Free, easy way to find unrepaired recalls on used vehicles
Related: Viewers take Call Christina wrecked car challenge

Federal Trade Commission Car Buying Tips:
FTC: Buying a Used Car
FTC: Dealer's Guide to the Used Car Rule

As per the FTC's new release:

The FTC's complaint against Jim Koons Management Company, which also does business as Jim Koons Automotive Companies, notes the company's purported "guarantee" that:

"Every certified Koons Outlet vehicle must pass a rigorous and extensive quality inspection before it can be sold. Our certified mechanics check all major mechanical and electrical systems and every power accessory as part of our rigid quality controls."

The complaint alleges that some cars were subject to unrepaired recalls, including those involving the key ignition switch, alternator-related defects that could cause unexpected vehicle shutdown or an electrical fire, and a rear suspension defect that could result in a fuel leak or fire.

The FTC's complaint against Lithia Motors cites claims for its dealer-backed "60- Day/3000 Mile" warranty, including:

" ...vehicles are put through an exhaustive 160-checkpoint Quality Assurance Inspection. ... We inspect everything from the tires and the brakes to suspension, drive train, engine components and even the undercarriage."

Nonetheless, the complaint alleges, some of the cars Lithia advertised were subject to unrepaired recalls involving defects in the key ignition switch and other safety issues.

The proposed consent orders, which would remain in effect for 20 years, prohibit the companies from:
--Misrepresenting material facts about the safety of used cars they advertise
--Claiming that their used vehicles are safe or have been subject to a 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 companies will also be required to inform recent customers, by mail, that their vehicles may have an open recalls.