July 16, 2024
Vroom Faces Allegations of Misleading Car Buyers
The Federal Trade Commission (FTC) and Vroom, an online used car retailer, have agreed on a $1 million settlement to resolve allegations that Vroom misled consumers about the condition of its vehicles and the availability of financing.
FTC Complaint Allegations
The FTC's complaint alleged that Vroom engaged in deceptive marketing practices by failing to fully disclose vehicle damage, overstating the availability of financing, and misrepresenting the qualifications for Vroom Advantage, a subscription service that offers certain benefits to customers.
Specific Allegations
Specifically, the complaint alleged:
- Vroom advertised vehicles as having no accidents or damage, when in fact they had been in accidents.
- Vroom claimed financing was available to all customers, when in fact many customers were denied financing or offered only financing with high interest rates.
- Vroom represented Vroom Advantage as a risk-free trial, when in fact customers were charged a cancellation fee if they canceled within 30 days.
Settlement Terms
Under the terms of the settlement, Vroom is required to pay $1 million in civil penalties. Additionally, Vroom must:
- Provide more accurate information about vehicle condition and availability of financing.
- Clearly disclose the terms and conditions of Vroom Advantage.
- Implement a compliance program to monitor and prevent future violations.
Vroom's Response
Vroom has agreed to settle the allegations without admitting any wrongdoing. The company issued a statement saying it is "pleased to have resolved this matter with the FTC." Vroom stated that it has already taken steps to address the concerns raised by the FTC and is committed to providing transparent and accurate information to its customers.
Implications for Consumers
The settlement serves as a reminder for consumers to be cautious when purchasing used vehicles online. Consumers should:
- Research the vehicle thoroughly before making a purchase.
- Get a vehicle inspection from an independent mechanic.
- Understand the terms and conditions of any financing or subscription services.
- Read and understand the FTC's Used Car Buyers Guide.
FTC's Vigilance in Protecting Consumers
The FTC's settlement with Vroom demonstrates the agency's commitment to protecting consumers from deceptive practices. The FTC encourages consumers to report any suspected violations of consumer protection laws.
Additional Information
The FTC complaint and consent order can be found on the FTC website: https://www.ftc.gov/legal-library/cmp/vroom-inc-vroom-financing-llc
Consumer Assistance
Consumers who have been affected by Vroom's alleged deceptive practices can contact the FTC at 1-877-382-4357 or visit the FTC website: https://www.ftc.gov/contact
