Three major car safety groups have recently appealed a Federal Trade Commission (FTC) ruling on vehicle recalls. These groups argue that the FTC has given car manufacturer General Motors (GM) as well as multiple car dealership chains permission to use deceptive advertising.
Specifically, the groups are claiming that the FTC has approved advertising campaigns that actively deceive consumers about the safety of recalled and repaired cars. If their appeal succeeds, many dealerships will be forced to completely change how they market previously recalled cars. Below, you’ll learn about the FTC’s decision, why it’s being appealed, and what this means for you.
Why the FTC Ruling Is Being Appealed
The FTC is responsible for regulations regarding truth in advertising. One of the Commission’s powers is to grant “consent” orders to companies that want to advertise in certain ways. These consent orders preemptively protect companies from getting sued for ads that may otherwise be considered deceptive.
The FTC had granted consent orders to General Motors and several associated car dealerships regarding their advertisements of recalled and repaired vehicles. These consent orders granted the recipients the right to use terms like “certified” and “150-point inspection” to describe the safety the recalled cars. The one requirement for these ads is that the seller needs to mention that the car “may” be under an open recall for safety defects.
A recall is “open” if the car has not yet been repaired for the safety defects that led to the recall in the first place. Dealers can advertise these vehicles as certified even if they still have unrepaired safety defects.
Many consumers are not aware of what “open recall” means. Furthermore, the phrase “may” implies that some of these cars are not actually under an open recall at all. Combined, this wording can easily be used to convince consumers that recalled cars are safer than they truly are.
This is especially egregious because cars that are advertised with these terms are often sold for more than $1200 more than equivalent cars advertised in other ways. This is despite the potential safety threats that the cars may still pose. Essentially, dealerships with these orders can use misleading advertising to not only sell unsafe cars, but even to make more profit off of them than their competitors could make on perfectly safe alternatives.
That’s why several car safety groups have come together to appeal these consent orders. The three groups include the Center for Auto Safety, Consumers for Auto Reliability and Safety (CARS), and the U.S. Public Interest Research Group (USPIRG). These organizations are dedicated to monitoring car safety in the US and lobbying for safer vehicles and laws. When they come together to address a single issue, it’s a sign that something significant has caught their attention that they believe should be addressed immediately.
The Importance of Recalls to Traffic Safety
The FTC’s consent orders wouldn’t be facing appeal if they weren’t considered dangerous. Vehicle recalls are instituted to protect people from dangerous cars. A recall is only issued if a vehicle poses a direct and dangerous threat to drivers in some way.
For example, GM has had to issue a number of recalls in the past several years. Just a small sample of the issues that led to the recalls include
- Faulty fuel pumps in more than 15,000 Cadillac, GMC, and Chevrolet models that could cause engine stalls while driving.
- Airbag problems in more than 9000 GMC and Chevrolet vehicles that might lead to a failure of the airbags in a crash.
- A second series of recalls for the same warranty issue in Chevrolet and GMC trucks involving faulty seatbelt pretensioners that might not protect riders in a crash.
All of these problems could directly lead to crashes or fail to protect drivers in case of a crash. A faulty seatbelt or airbag can be just as deadly as an engine stalling at highway speeds.
That’s why it’s so alarming that dealerships and GM have permission to advertise recalled vehicles in misleading ways. GM can use the consent order to advertise faulty vehicles that they’ve bought back from customers as certified and inspected without ever fixing the issues. The three consumer safety organizations appealing the orders believe that they could and may already have directly led to consumer deaths.
What to Expect if the Appeal Succeeds
The appeal is still in its early stages. The FTC must review it and consider the arguments against the consent orders it has already granted. However, if the appeal succeeds, it will significantly impact how car dealerships can advertise their vehicles.
In particular, you should expect to see many fewer dealerships using the terms “certified” or “150-point inspection. That doesn’t mean the cars they are offering are any more or less safe. These terms are nothing but marketing slogans.
Whether or not the appeal succeeds, you should always rely on your own research much more heavily than the car dealership’s information. Take steps like:
- Find the vehicle’s CarFax report to look for crashes or recalls in its history.
- Checking the vehicles VIN against open recalls to see if it’s ever had a recall repair performed.
- Bring the car to a mechanic you trust to have a pre-purchase safety inspection performed.
All of these actions will help you learn the true safety of the car. That can help you avoid buying a vehicle that’s already been proven to be unsafe.
Don’t Risk an Unsafe Used Car
The FTC consent orders currently allow GM and certain car dealerships to imply that recalled and resold cars are safe when they may in fact have deadly safety failures. If the appeal succeeds, marketers won’t be able to continue these deceptive practices. However, that doesn’t change much for you if you’ve already purchased an unsafe recalled car.
Under California law, you don’t have to put up with an unsafe car. If your car is under warranty, then you can potentially make a lemon law claim, regardless of whether your vehicle is used or new. If you’re not sure whether you’re eligible, you can reach out to expert lemon law lawyers to discuss your situation.