The State of Texas is alleging in a new lawsuit that online car retailer Vroom has routinely failed to disclose vehicle history, vehicle features, and work done on vehicles it sold to customers in Texas. On April 20, Texas Attorney General Ken Paxton filed a lawsuit in the District Court of Travis County against Vroom, which also operates as Texas Direct Auto.
An unrelated class-action lawsuit has already been filed against the online retailer, and Florida has filed a complaint regarding Vroom’s title transfer issues in the state. Consumer advocacy groups have repeatedly issued warnings following the multitude of complaints received about Vroom.
The lawsuit notes that since 2020, consumers have filed nearly 5,000 complaints with the Better
Business Bureau and Office of the Attorney General of Texas. The vast majority of complaints have been filed over the past year. The lawsuit states that Vroom has “not managed their growth effectively and have allowed inadequate systems and procedures to spiral into violations of the DTPA [Texas Deceptive Trade Practices Consumer Protection Act].”
Specifically, the lawsuit alleges the following violations:
- Misrepresenting the condition and characteristics of vehicles
- Misrepresenting financing approval
- Failing to obtain clear title before selling
- “Spot delivery scams”
- Failing to disclose systemic delays in processing title and registration
- Failing to disclose higher insurance premium requirements for some customers
Flood Vehicles, Hidden Accidents, and More
The State of Texas’ lawsuit details a few examples of the poor conditions of vehicles misleadingly sold to Texas customers.
“In one case, within hours of delivery, a Texas consumer reportedly noticed that the oil change and engine service lights came on, and there was an irregularity in the windshield and scratches on the wheel. The consumer took the vehicle to a nearby dealership, and after an inspection was told it needed spark plugs, new filters, an oil change, and a radiator leak to be repaired.”
“In another case, a Texas consumer complained that when Defendants delivered the vehicle, the consumer immediately noticed a strong odor in the interior that she described as similar to being near a boat. She noted that the interior carpet looked as if it had been completely replaced. The next day, she took it to a mechanic for a standard inspection. The inspection identified several areas of internal rust that could only be caused by sitting in water for an extended amount of time, as well as other conditions that indicated flood damage.”
Yet another example quoted a Vroom customer whose ‘new’ car needed $8,000 in repairs soon after buying from the online retailer. In a sad but almost comical case, a customer bought a car from Vroom with a driver’s seat that was pushed as far back as it could go without the ability to move it forward. So much for the “rigorous inspection process” that Vroom claims to abide by.
The Texas lawsuit against Vroom also details numerous examples of title and registration delays stretching far beyond the 60-day window permitted for registering a new vehicle.
Vroom’s Record Profits Come At the Expense of Consumers
In 2021, Vroom reported well over $2.4 billion in revenues. Profits rose 171% year-over-year to $164.7 million. With a class action lawsuit already filed and the States of both Florida and Texas hot on their tails, Vroom’s honeymoon with the American consumer may be coming to an abrupt end. We’ll keep you up to date with the latest at caredge.kinsta.cloud.
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If you think you’ve been the victim of deceptive dealer practices, you can find contact info for every state’s attorney general and consumer protection office here.