The Federal Trade Commission (FTC) is sending over $934,000 in refunds to consumers who were impacted by shipping delays and misleading practices from online used car dealer Vroom. The company, based in Texas, has faced legal action for failing to meet delivery promises and misrepresenting the quality of its vehicles.
Vroom, an online platform that has sold more than 170,000 used cars since 2019, promised consumers a hassle-free experience by providing vehicles that had undergone “multiple inspections.” However, numerous complaints indicated that the cars received by consumers were often in poor condition, with issues ranging from loud grinding noises to bald tires and worn brakes. The company also failed to meet delivery timelines, with some customers waiting as long as three months for their cars to arrive.
Under the terms of a recent settlement, Vroom has agreed to pay $1 million to refund consumers who were harmed by its misleading advertising and poor business practices. This settlement also prohibits the company from making false claims about inspections and delivery timelines in the future. The refunds come from this settlement, and more than 20,000 consumers will receive checks to compensate for the delays and issues they encountered.
“Vroom promised fast deliveries of thoroughly inspected cars, but failed to deliver on those promises,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Consumers deserve transparency and the right to make informed decisions when buying a used car, and Vroom’s actions violated those rights.”
The FTC’s complaint highlighted several legal violations, including Vroom’s failure to provide consumers with proper disclosures required by the Used Car Rule, the Pre-Sale Availability Rule, and the Mail, Internet, and Telephone Order Rule (MITOR). These rules ensure that car buyers receive critical information, such as warranty details and the right to cancel purchases or consent to delayed shipments.
The company’s failure to meet delivery timelines also violated MITOR, which mandates that businesses provide customers with the option to approve shipping delays or cancel the transaction and receive a full refund. In many instances, Vroom did not allow consumers the opportunity to consent to extended shipping times and delayed refunds when cars were not delivered on time.
In addition to the settlement, Vroom is required to follow FTC regulations going forward, including providing consumers with proper Buyers Guides, offering transparent warranty terms, and ensuring that all claims about delivery timelines are documented.
The FTC is sending checks to 20,361 affected consumers, with each refund based on the harm caused by Vroom’s actions. Recipients should cash their checks within 90 days, as indicated on the check. For any questions, consumers can contact the refund administrator, Simpluris, at 866-675-2533, or visit the FTC website for further details about the refund process.
In total, the FTC’s 2024 actions have resulted in more than $337 million in refunds to consumers across the country, further demonstrating the agency’s commitment to holding companies accountable for unlawful business practices.
