GM sold used cars subject to recalls image

General Motors and two car dealers settled US claims that they advertised numerous used vehicles without disclosing that certain cars offered for sale were subject to previously announced open recalls for safety issues.

General Motors, Jim Koons Management and Lithia Motors Inc. have agreed to settle separate Federal Trade Commission administrative complaint allegations that each touted how rigorously they inspect their cars, yet failed to disclose that some of the used cars they were selling were subject to unrepaired safety recalls. Jim Koons Management, which has 15 dealerships in the Mid-Atlantic region, and Oregon-based Lithia Motors Inc., which has more than 100 stores in the West and Midwest, are two of the nation’s largest used car dealers. “Companies touting the comprehensiveness of their vehicle inspections need to be straight with consumers about safety-related recalls, which can raise major safety concerns,” said Jessica Rich, the head of the FTC’s consumer protection unit. According to the FTC’s complaint, those cars subject to recalls had defects that can cause serious injury, including a key ignition switch defect that can affect engine power, power steering, braking and airbag deployment, problems in the body control module connection system that can affect braking, and chassis electronic module defects that can cause engine stalls.

Under the settlement, which remains in effect for 20 years, Detroit-based GM and the dealers are prohibited from misrepresenting material facts about the safety of used cars they advertise. They must also inform customers that their vehicles may have an open recall. Although the settlement didn’t include monetary penalties, going forward on each violation of the FTC’s orders can result in a fine of up to 16,000 dollars.

Via Bloomberg