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FTC Enforcement Actions Target Disclosure of Open Recalls in CPO Programs
NIADA Advises Dealers to Inform Consumers About Open Recalls on Their Vehicles
Arlington, Texas (Feb. 8, 2016) Independent used vehicle dealers are again advised to check their inventory and have any open recall repaired prior to sale. If the repair cannot be completed, NIADA strongly recommends that dealers disclose the existence of open recalls to their customers at the time of sale.
Recent enforcement actions brought by the Federal Trade Commission against General Motors and two dealer groups highlight the need for such disclosures.
GM and the dealers advertised that many of their vehicles had undergone a comprehensive inspection process, often as part of a certified pre-owned program. But the FTC alleged in separate complaints that by touting those inspection processes but not informing consumers about the existence of unrepaired safety recalls, GM and the dealers violated the FTC Act.
The companies denied any wrongdoing and were not assessed any fines. However, they are prohibited from claiming their vehicles have undergone a rigorous inspection unless they are free of unrepaired safety recalls. If a safety recall is not repaired, the companies must disclose the existence of any safety-related recall in close proximity to any statement about the inspection process.
NIADA has created its own certified pre-owned program, through which dealers can certify eligible vehicles. However, NIADA reminds participating dealers that vehicles with safety-related recalls involving major structural, mechanical or safety components cannot be certified.
NIADA CPO program dealers will receive revised vehicle inspection checklists that can be used to review a vehicles condition with customers prior to sale.
All dealers, whether participating in the NIADA CPO program or not, should use all available resources to check each vehicle for the existence of open recalls and ensure recalls are properly fixed or the consumer is made aware of them.
As a result of NIADAs advocacy in Washington, D.C., dealers can now search their vehicles by VIN using the federal governments VIN search tool, which can be found at https://vinrcl.safercar.gov/vin/.
NIADA continues to call on the federal government to make this tool capable of searching more than one VIN at a time.
NIADA has also partnered with AutoZone to make dealers search for recall data easier. VIN Recall is the newest AutoZone Connect Dealer feature. With this tool, dealers can load multiple VINs at once, click search and view all daily safety recalls, service recalls, technical service bulletins and repair solutions.
For more information, visit http://www.niada.com/autozone_service_drive.php.