CarMax settles charges it did not disclose U.S. vehicle recalls

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NEW YORK (Reuters) – CarMax Inc (NYSE:KMX), the largest U.S. used car retailer, agreed to pay $1 million to resolve claims by 36 states that it failed to disclose open safety recalls to consumers before selling vehicles to them.

Thursday’s settlement followed a multistate probe led by Illinois Attorney General Kwame Raoul that began in 2014, amid concerns that consumers were not being warned about necessary repairs and potentially serious safety recalls.

The accord requires the Richmond, Virginia-based company to provide consumers with hyperlinks and QR codes to look up recalls, and documentation that “clearly and conspicuously” discloses open recalls before presenting other sales paperwork.

New York Attorney General Letitia James, who joined the settlement, in a statement said CarMax sometimes classified vehicles as “safe” even if they had been recalled for airbags or other safety features.

“When someone buys a car, they need to know that it will keep them safe,” James said.

In a statement, CarMax said it has since 2014 disclosed recalls when advertising and selling vehicles.

Chief Operating Officer Joe Wilson added that CarMax is not authorized to repair recalled vehicles, and tries to ensure that consumers use manufacturer-authorized facilities.

CarMax said it has more than 230 stores, and sold about 924,000 used vehicles in its fiscal year ending Feb. 28. 2022.