MADA raises concern with Maryland regulators that TrueCar referrals may violate sales licensing laws
In a bulletin to its membership this week, Maryland Automobile Dealers Association (MADA) reported that it had met with the states Motor Vehicle Administration requesting the agencys review of the legality of TrueCar referrals of prospective car buyers to Maryland dealers. Maryland, like many other states, including Virginia, that have recently become involved with looking into business models like TrueCars, is concerned that they could be violative of longstanding auto sales licensing laws.
The MADA bulletin to Maryland dealers follows notification last month by the Virginia Motor Vehicle Dealer Board (MVDB) to Virginia dealers of similar concerns it has that TrueCar referrals could violate state auto sales licensing laws. MVDB will take up the TrueCar matter at its regular meeting in Richmond next Monday morning, Jan.9, where TrueCar has been invited to attend and present its position.
Unless TrueCar can show state regulators that their referral practices are not violative of auto sales licensing laws, states like Maryland and Virginia may insist that licensed dealers in their respective jurisdictions not participate in such third party referral programs.
More on this matter as it unfolds in the days ahead. In the meantime, WANADAs reporting of these facts strictly and unequivocally relates to the legal inquiries that are underway in Maryland and Virginia and other states relative to compliance by dealers and third parties with auto sales licensing laws. Accordingly, WANADA has no recommendation of any kind to make to members in ongoing business relationships with TrueCar or any other third party referral businesses. Correspondingly, dealers are cautioned to be mindful of the antitrust laws that strictly prohibit concerted activity among competitors in making determinations about who to do business with or not do business with.
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