The Federal Trade Commission (FTC) has recently cracked down on Vroom, an online used car dealership, for allegedly misleading customers. The FTC’s action highlights the importance of transparency and fair practices in the online car market, especially when dealing with “Vroom Cars” – vehicles purchased sight unseen and delivered directly to consumers.
Vroom, based in Texas, faces accusations of misrepresenting the quality of their vehicles and failing to honor delivery promises. A proposed settlement requires Vroom to pay $1 million to compensate affected customers and mandates an end to their deceptive practices.
Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated, “Vroom promised the fast deliveries of thoroughly inspected cars, but sped right past compliance.” This statement underscores the FTC’s commitment to ensuring that online car dealers, like all businesses, adhere to consumer protection laws.
Alt: A close-up view of a mechanic inspecting the brakes of a used car, emphasizing the importance of thorough vehicle checks before purchase.
According to the FTC complaint, Vroom violated several key regulations, including the Used Car Rule, the Pre-Sale Availability Rule, and the Mail, Internet, and Telephone Order Rule (MITOR). These violations stem from issues with vehicle inspections, delivery timelines, and warranty disclosures.
Since 2019, Vroom has become a significant player in the online used car market, selling over 170,000 vehicles. To reassure customers buying cars online, Vroom advertised “multiple inspections” and even claimed a rigorous 184-point inspection process for every vehicle. This was meant to build confidence in “vroom cars” purchased remotely.
However, customer experiences painted a different picture. The FTC complaint details numerous complaints about the poor condition of “vroom cars” upon delivery. Consumers reported issues ranging from alarming grinding noises to dangerously worn tires and brakes, directly contradicting Vroom’s advertised inspection promises.
Alt: A car carrier truck delivering a used car to a residential address, illustrating the direct-to-consumer delivery model of online car dealerships like Vroom and potential delivery delays.
Delivery delays were another major point of contention. Vroom advertised delivery within 14 days or less. Despite this promise, the FTC found that Vroom frequently failed to meet this timeline and did not properly inform customers of delays or offer options for consent or cancellation with prompt refunds, as required by MITOR. Some customers reportedly waited three months or longer for their “vroom cars” to arrive.
The FTC’s Used Car Rule mandates that dealers provide a “Buyers Guide” for each used car, detailing warranty information or “as is” sale conditions. The complaint alleges Vroom often provided this crucial guide late in the purchase process and frequently omitted required information, hindering consumers’ ability to make informed decisions about “vroom cars”.
Furthermore, Vroom allegedly violated the Pre-Sale Availability Rule by failing to prominently display warranty terms on their website near the vehicle listings. Customers were also not adequately informed about how to access warranty details before finalizing their purchase, further obscuring important information about “vroom cars”.
Alt: The logo of the Federal Trade Commission (FTC), symbolizing the regulatory body responsible for consumer protection and taking action against companies like Vroom for deceptive practices.
The proposed settlement requires Vroom to pay $1 million, which the FTC will use to refund harmed consumers. Crucially, Vroom is also prohibited from making future misleading claims about vehicle inspections and shipping times. The settlement mandates Vroom to properly document all shipping promises and strictly adhere to MITOR, the Used Car Rule, and the Pre-Sale Availability Rule going forward.
This FTC action serves as a strong reminder to online car buyers to remain vigilant and thoroughly research dealerships like Vroom before purchasing “vroom cars”. It also underscores the FTC’s commitment to protecting consumers in the evolving online marketplace and ensuring businesses are truthful in their representations of “vroom cars” and services.
