AG HEALEY ANNOUNCES $1 MILLION MULTISTATE SETTLEMENT WITH CARMAX OVER FAILURE TO DISCLOSE SAFETY RECALLS

AG HEALEY ANNOUNCES $1 MILLION MULTISTATE SETTLEMENT WITH CARMAX OVER FAILURE TO DISCLOSE SAFETY RECALLS   

Joins AG Coalition Alleging Company Violated States’ Consumer Protection Laws 

BOSTON – Attorney General Maura Healey today announced her office joined a coalition of 35 attorneys general in reaching a settlement with CarMax Auto Superstores, Inc., following an investigation into the company for illegally selling used vehicles with open recalls, despite claiming to sell “safe” vehicles.  

According to the assurance of discontinuance, the states allege that CarMax, which is headquartered in Virginia, participated in deceptive advertising by telling consumers that its reporting and inspecting practices ensured it was selling “safe” cars. In reality, CarMax had allowed for vehicles with open recalls related to their safety to be sold without proper inspection, and without disclosures to buyers. 

“Buying a vehicle is a significant financial expense for many families and individuals, and they need to be sure that the car they are purchasing is both operational and safe,” said AG Healey. “Under this industry-changing settlement, CarMax will pay for its practices and be required to make important safety disclosures to consumers shopping for cars.”   

Federal statutes, such as the Motor Vehicle Safety Act, prohibit the sale of new vehicles with open recalls, however, no such statutory prohibition exists for the sale of used vehicles with open recalls. This settlement establishes precedent for a requirement that used car dealers disclose open safety recalls to consumers before they buy. As a result, CarMax will present the consumer with copies of any open recalls and obtain the consumer’s signature on a standalone disclosure document before presenting any other sales paperwork. CarMax has agreed to not falsely represent vehicles as “safe.”.  

Additionally, CarMax now includes hyperlinks for vehicles advertised online and QR codes for vehicles on the lot that link directly to any open recalls on the vehicle, allowing consumers to access the data as they shop.  

CarMax will continue to use the National Highway Traffic and Safety Administration’s vehicle identification number tool to provide important safety information to consumers. Consumers also have access to this tool and are able to check it for any open recalls on their vehicles. 

CarMax is further required to pay the states $1 million, with approximately $21,000 going to Massachusetts. 

Joining AG Healey in today’s settlement, led by Illinois Attorney General Kwame Raoul, are the states of Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin. 

This case was handled for Massachusetts by Deputy Division Chief Mychii Snape and Division Chief Shennan Kavanagh of the AG’s Consumer Protection Division, as well as Deputy Division Chief Krystle Carvalho of the Consumer Advocacy and Response Division.