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Settlement against Carfax argued

November 17, 2010

Under the proposed settlement of a nationwide class action lawsuit against Carfax, an Ohio judge would award additional free vehicle-history reports or other benefits to car buyers who purchased a Carfax report before Oct. 27, 2006. The suit accuses Carfax of misleading consumers into believing that its reports contain complete information about vehicle histories. In agreeing to settle the case, Carfax denies any wrongdoing.

 

The proposal, filed in the Court of Common Pleas in Warren, Ohio, also would require Carfax to make prominent disclosures that its vehicle-history reports might not contain complete information.

 

But a prominent Kansas lawyer, Bernard E. Brown, calls the proposed settlement "worse than no settlement at all." Brown represents clients who unsuspectingly bought previously wrecked vehicles, many of which, he says had "clean" Carfax reports.

 

Brown said the settlement, which received preliminary court approval on Oct. 27, is little more than a way for Carfax to avoid liability for potentially millions of unreliable history reports. He said the settlement should be offering participants cash instead of vouchers for additional CarFax reports.

"The very idea that the settlement gives people free reports is basically a marketing tool," he said.

 

The proposal requires Carfax to change its disclosures to ensure that customers aren’t misled into believing that its history reports are more reliable than they actually are.

 

Brown countered that the additional disclosures only further protect Carfax. He noted that the settlement would only require them for two years, and it doesn’t require Carfax to change its print or television advertising, which he said are also misleading. Carfax spokesman Larry Gamache said Carfax reports always have carried a statement that the company does not have complete information on every vehicle.

 

Carfax spokesman Larry Gamache said Carfax reports always have carried a statement that the company does not have complete information on every vehicle.

 

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