FTC approves agreement with GM, 2 dealers on open recalls

FTC approves agreement with GM, 2 dealers on open recalls

The Federal Trade Commission gave final approval to consent agreements with General Motors and two dealer groups, one local to the Washington area, on procedures for advertising and selling cars with open recalls.

The FTC had charged that the retail groups were advertising that their used vehicles had undergone a multi-point inspection even though they had not been repaired for safety defects for which they had been recalled. The advertising did not disclose the open recall and incorrectly implied that the vehicles were safe, the FTC contended.

Under the consent agreement, the retailers may sell those vehicles if the sales documents disclose near the inspection claims that the vehicle is under recall. Consumer groups objected, saying that a buyer can easily miss the disclosure statement in the mass of sales documents.

The FTC reached preliminary agreement with GM and the dealer groups earlier in the year, followed by a public comment period. The final agreement will be in effect for 20 years.

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