FTC orders Vroom to pay $1M after it ‘sped right past compliance’

FTC seal

Vroom, the former online used car dealer, agreed to pay $1 million to settle allegations by the Federal Trade Commission (FTC) that it didn’t abide by consumer protection laws, including providing prompt refunds.

The Texas-based company sold more than 170,000 used cars through its website before it shut down that part of its business in January. Usually, customers bought the cars without seeing or driving them first. The company claimed the cars underwent detailed inspections, in which 184 points were checked, to make sure they were in good condition.

Under the Used Car Rule, Vroom was supposed to prepare “Buyers Guides” for each car, including whether a warranty was provided and what was covered, but Vroom failed to do so, the FTC alleged. Complaints by consumers about the poor condition of cars and the company failing to deliver a purchased vehicle within the promised 14 days mounted, the FTC said in its complaint, filed Tuesday in U.S. District Court for the Southern District of Texas. Some customers waited three months for their cars to be delivered.

lock iconTHIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.