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FTC vs Vroom, Inc.

By Ben Mayer

On June 2, 2024, the Federal Trade Commission filed a lawsuit against Vroom, Inc., a Texas-based online used car dealer. In the Complaint, the FTC alleged that Vroom violated several of the FTC’s trade regulation rules relating to misrepresentations made concerning  the company’s vehicle examination processes, failure to promptly deliver vehicles as promised, and failing to properly inform buyers of the scope of each car’s warranty. The proposed settlement between the parties requires Vroom to pay $1 million to the FTC to be used to refund customers harmed by these violations.

This suit highlights the importance of compliance with federal industry regulations, insuring that representations made to customers are followed through, and having consumer-friendly options in place when those representations cannot be made as promised. Vroom was put under a microscope when complaints concerning defects in vehicles sold ran counter to assurances made regarding each vehicle’s pre-sale inspection. Vroom must now document all claims regarding promises made to consumers and assure compliance with the stated violated regulations.

Click here to read more about this case as well as the complaint filed in the U.S. District Court for the Southern District of Texas as well as the proposed settlement agreement.  

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