The Federal Trade Commission (FTC) has taken action against online used car dealer Vroom, ordering the company to refund over $1 million to customers and implement significant business practice changes. The FTC alleges that Vroom engaged in illegal conduct that misled consumers about vehicle condition, delivery dates, and other key aspects of its business.
Alleged Illegal Conduct
The FTC's complaint against Vroom outlines several alleged illegal practices:
- Misrepresentation of vehicle condition: Vroom allegedly advertised vehicles as being in better condition than they actually were, omitting or downplaying significant mechanical issues.
- Undisclosed delivery delays: Vroom is accused of failing to provide timely delivery estimates and knowingly misleading customers about the actual delivery dates of their vehicles.
- Deceptive business practices: The FTC alleges that Vroom used high-pressure sales tactics, misled customers about financing options, and failed to provide adequate customer support.
- Insufficient disclosure of material terms: Vroom is said to have violated the FTC's Checkbook Mandated Buyers Guide requirements by failing to provide customers with clear and accurate information about vehicle disclosures, including safety features, warranty coverage, and potential liens.
Business Practice Changes
As part of the settlement agreement with the FTC, Vroom has agreed to make significant changes to its business practices, including:
- Providing accurate vehicle descriptions: Vroom must now disclose all known mechanical issues and provide consumers with clear and detailed descriptions of vehicle condition.
- Honoring delivery promises: Vroom is required to provide reliable delivery estimates and keep customers informed of any delays or changes.
- Eliminating deceptive sales tactics: Vroom is prohibited from using high-pressure sales tactics or misleading customers about financing options and other material terms.
- Complying with Checkbook Mandated Buyers Guide requirements: Vroom must provide consumers with a clear and accurate Checkbook Mandated Buyers Guide that includes all required disclosures.
- Establishing a customer support system: Vroom is required to implement a robust customer support system to address customer inquiries and complaints promptly and effectively.
Refund to Customers
In addition to the business practice changes, Vroom is required to refund over $1 million to customers who were harmed by the company's illegal conduct. This includes eligible customers who experienced significant delays in vehicle delivery or who purchased vehicles that were misrepresented as to their condition.
Impact on Consumers
The FTC's action against Vroom is a significant victory for consumers. The required business practice changes will help protect consumers from deceptive practices and ensure that they have the information they need to make informed decisions when purchasing a used car online. The refund to customers will provide compensation for those who were harmed by Vroom's illegal conduct.
Next Steps for Consumers
If you believe you may have been a victim of Vroom's illegal practices, you can contact the FTC at 1-877-FTC-HELP or visit the FTC's website at www.ftc.gov. The FTC will provide information on how to file a complaint and seek redress for your losses.
Additional Resources
- FTC Press Release: https://www.ftc.gov/news-events/press-releases/2023/02/ftc-orders-online-used-car-dealer-vroom-refund-customers-1
- FTC Complaint: https://www.ftc.gov/legal-library/complaints/ftc-v-vroom-inc
- FTC Checkbook Mandated Buyers Guide Requirements: https://www.consumer.ftc.gov/articles/used-car-rule
