Buyer Beware: ‘Certified’ Used Cars May Still Be Under Recall

General Motors sometimes failed to tell consumers that its used vehicles, which it advertised as having been thoroughly checked for mechanical problems, had safety problems serious enough to require a recall.CreditBill Pugliano/Getty Images

The public has long been wary of used cars and the claims of roadworthiness by the dealers who sell them. On Friday, the nation’s main advertising regulator issued a ruling that consumer groups complained will give used-car dealers too much leeway in the disclosures they are required to make.

The Federal Trade Commission, in a decision that also drew criticism from some lawmakers, said that General Motors and two big used-car chains could advertise their used vehicles as having been carefully inspected and repaired even if the cars might still be subject to safety recalls for problems that had not been fixed.

The only requirement would be that the dealers must advise buyers that the cars could be subject to recalls and tell them how to determine if they are. There would be no requirement that any recall problems be specified or that any repairs be made.

The ruling follows a succession of high-profile cases in which automakers concealed crucial information from car owners, including General Motors’ failure to disclose a deadly ignition switch flaw, Volkswagen’s misrepresentation of pollution emissions, and Honda’s failure to report potential safety problems for more than a decade.

Used-car dealers, in particular, have drawn criticism for selling vehicles under recall without addressing their defects, including violently exploding airbags that have been linked to 11 deaths in the United States. Under lobbying pressure from the used-car industry, efforts to introduce tougher laws for used cars have languished in Congress.

Senators who had been among those pressing the F.T.C. to take a harder line criticized the agency’s action. “The disclosure requirements do more to deceive than fully inform, and worse, could protect unscrupulous dealers,’’ Richard Blumenthal, a Connecticut Democrat, said in a statement.

The ruling, in the form of a settlement with G.M. and the two car chains over their advertising claims, will be in effect for 20 years. The F.T.C. also proposed a similar settlement with several other car retailers it had been investigating. The settlements could set a buyer-beware precedent for other used-car dealers to adopt, consumer groups warned.

“It is the worst thing the F.T.C. has ever done on any issue because it is allowing false advertising,” Rosemary Shahan, the president of Consumers for Auto Reliability and Safety, one of the groups that had been lobbying for months against the settlement.

The F.T.C.’s action, which the agency defended as providing consumers with enough information to make informed purchases, is at odds with the position of the country’s main auto safety regulator, the National Highway Traffic Safety Administration, which has called for used-car dealers to fix items subject to a recall before selling a vehicle. But the safety regulator does not have the authority to order such fixes.

Safety advocates said the ruling was particularly troubling at a time when the N.H.T.S.A. is struggling with problems including the recall of 42 million vehicles for the exploding Takata airbags that have also been linked more than 180 injuries.

Because of the huge number of vehicles with recalled Takata airbags, it will take several years to fix them all. Under the F.T.C. decision, it would not be necessary to for a dealer to tell consumers that the vehicle they are considering has a Takata bag, said Michael Brooks, the acting director of The Center for Auto Safety.

Read more: http://www.nytimes.com/2016/12/16/business/buyer-beware-certified-used-cars-under-recall.html?_r=0

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