US: GM investigated by FTC for certified pre-owned sales image

The Federal Trade Commission is currently probing General Motors, the largest US automaker and the third biggest in the world, for failing to coerce dealers to address repairs under publicly announced recalls before selling them as “certified pre-owned”.

Such investigations could have a significant impact on the financial books, because of increased fines, civil consent orders and criminal penalties, said the automaker, though it could not detail or estimate the potential impact. “On June 3, 2015, we received notice of an investigation by the Federal Trade Commission concerning certified pre-owned vehicle advertising where dealers had certified vehicles allegedly needing recall repairs,” said GM in a filing with the Securities and Exchange Commission. “We continue to investigate these matters and believe we are cooperating fully with all requests for information in ongoing investigations,” commented the disclosure. So far it’s not yet clear if the involved dealers are also under the FTC investigation.

This could be the latest in a huge line of investigations targeting GM because of its recall campaigns last year covering almost 30 million vehicles sold across the planet. The biggest conundrum involves the February announcement that 2.6 million vehicles were recalled for defective ignition switches – today linked to 124 deaths and hundreds of injuries. The most damaging probe of the faulty switches could be the one led by the U.S. Attorney for the Southern District of New York, Preet Bharara. He is currently probing whether the company was criminally liable in failing to notify federal safety regulators of the faulty parts in a timely manner – and actually knowing about the issue for more than a decade.