Consumer groups seek FTC probe on CarMax for "deceptive" ads - NYT

June 24 Tue Jun 24, 2014 3:58pm EDT

June 24 (Reuters) - Used-car retailer CarMax Inc's advertisements promising its vehicles undergo quality checks are deceptive as it does not fix cars recalled by automakers before reselling them, 11 consumer groups said in a petition to the U.S. Federal Trade Commission, the New York Times reported.

CarMax, however, said that used-car retailers were not authorized by automakers to carry out repairs to recalled cars.

"CarMax provides the necessary information for customers to register their vehicle with the manufacturer to determine if it has an open recall and be notified about future recalls," CarMax spokesman Casey Werderman said in an email to Reuters on Tuesday.

The petition, filed on Monday, is being supported by New York Senator Charles Schumer, the New York Times reported. (nyti.ms/1rv7Uhh)

Werderman also said CarMax supported legislation mandating used-car retailers to fix recalled cars.

The company sold 526,929 used cars in the year ended Feb. 28, according to its latest annual filing.

Shares of CarMax, the largest U.S. used-car retailer, were down 3.4 percent at $50.16 in late trading on the New York Stock Exchange. (Reporting by Ramkumar Iyer in Bangalore; Editing by Kirti Pandey)