U.S. government agency sued over sale of ‘certified’ used cars

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By Diane Bartz | WASHINGTON

WASHINGTON The Center for Auto Safety and five
other groups filed a lawsuit against the Federal Trade
Commission (FTC) on Monday for allowing used cars to be
advertised as “certified” or safe despite being the target of an
outstanding safety recall.

The FTC reached an agreement in January 2016 with General
Motors Co and two dealership companies, Jim Koons
Management and Lithia Motors Inc, that allows them to
advertise cars as “certified pre-owned vehicles” even though
they might have an issue related to a safety recall that still
needs to be fixed.

The agency did require the companies to disclose any
uncompleted safety recalls, and GM spokesman Jim Cain said the
Detroit automaker does not allow dealers to advertise vehicles
as “certified per-owned” unless recall repairs are made.

But Consumers for Auto Reliability and Safety, the Center
for Auto Safety, the U.S. Public Interest Research Group (PIRG)
and three state affiliates argued that the FTC’s consent decree
still allowed auto dealers to sell used vehicles that need
repairs due to potentially dangerous defects.

“Instead of protecting consumers, the FTC is protecting
unscrupulous auto dealers who engage in false and deceptive
advertising about the safety of the cars they offer for sale to
the public,” said Rosemary Shahan, president of Consumers for
Auto Reliability and Safety.

The FTC declined comment on the lawsuit and GM’s Cain said
the company had not reviewed the complaint. (Additional reporting by David Shepardson)



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