CarMax order to pay $1.1M to settle California lawsuit over registration & ownership documentation
Image courtesy of CarMax.
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For the second time in about a month, CarMax has reached a settlement to resolve allegations of wrongdoing.
The newest one is in connection with the district attorney for Riverside County in California. According to a news release distributed at the end of March, CarMax has been ordered to pay $1.1 million to resolve a consumer protection lawsuit involving the sale of used vehicles in California.
In February, allegedly not handling vehicles correctly with members of the military on active duty landed CarMax in trouble with the Justice Department to the tune of nearly $500,000.
The lawsuit in Riverside County alleged CarMax dealerships violated California law by failing to timely submit required documentation to transfer registration and ownership of used vehicles to purchasers.
Under California law, officials explained that dealers must submit an application to the Department of Motor Vehicles (DMV) to transfer registration within 30 days of the date of sale. The same deadline applies to the transfer of the certificate of ownership, commonly known as the “pink slip,” unless the application is returned by the DMV for missing information.
As part of the settlement, the district attorney’s office said CarMax has agreed to implement and maintain enhanced business practices to ensure compliance with state consumer protection laws.
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These measures include placing a sales hold on vehicles when the dealership does not have possession of the title or a clear ability to obtain it within the required timeframe, completing necessary smog checks or VIN verifications prior to sale, maintaining sufficient staffing to process ownership transfers, and designating a senior-level manager responsible for overseeing compliance.
According to the news release, the total payment of $1.1 million includes $900,000 in civil penalties, $150,000 for investigative costs, and $50,000 to support statewide consumer protection efforts.
“CarMax cooperated with the investigation and has taken steps to address the issues identified. The company resolved the matter without admitting the allegations in the complaint,” the Riverside County district attorney’s office said in the news release.
The judgment was entered in Santa Clara County Superior Court as part of a settlement of a civil enforcement action brought by Riverside County District Attorney Michael Hestrin, along with the district attorneys of Los Angeles, San Francisco, Santa Clara, Sonoma, and Ventura counties.