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Watchdog rips deal in Carfax lawsuit

Time-limited discounts won't make up for faulty title searches, group says.

Under the settlement, people who used Carfax before Oct. 27, 2006, could get:

$20 off an inspection of their vehicle by a designated third-party.

A voucher for two free Carfax Vehicle History Reports within one year of final approval of the settlement.

One free report within two years of the settlement.

A voucher for 50 percent off car reports over a 30-day-period within three years of the settlement.


WASHINGTON -- An auto safety advocacy group is objecting to the proposed settlement of a class-action lawsuit against Carfax Inc. that claimed the company's title searches for used cars were misleading.

Public Citizen argues the settlement doesn't go far enough to reimburse customers who got faulty searches and that a lot of people won't benefit at all from the deal because of its time limits.

Virginia-based Carfax Inc., a unit of Southfield-based R.L. Polk & Co., is a privately held auto information and marketing company that conducts millions of title searches yearly using a vehicle's 17-character Vehicle Identification Number.

Customers pay $25 for the searches before they buy a used car so they can find out a vehicle's history, including previous serious accidents or major insurance claims. The information can provide evidence of past severe damage that could signal lingering mechanical and other problems.

Some Carfax customers sued the company in 2004 after discovering Carfax wasn't searching the complete police accident records from 22 states and the District of Columbia. The lawsuit claimed Carfax started misleading customers in 1998, after the company lost access to accident records from all 50 states through the National Crime Insurance Bureau database. Without that data, Carfax reports weren't showing some serious crashes, the lawsuit said.

Under the settlement tentatively approved in October by Judge Andrew D. Logan of Trumbull County Common Pleas Court in Warren, Ohio, people who used Carfax before Oct. 27, 2006, would get $20 off an inspection of their vehicle, a voucher for two free Carfax Vehicle History Reports within one year of final approval of the settlement, one free report within two years of the settlement and a voucher for 50 percent off car reports within three years of the settlement.

More than 10 million consumers are affected, said Carfax spokesman Larry Gamache, who said notice of the settlement has been e-mailed to 1.8 million people who used the service in the past year.

Gamache said the company takes Public Citizen's objections seriously and will review them. He acknowledged that the database doesn't contain every accident.

"We are working fast and furious to gather municipal accident information," he said, noting the company also seeks information from repair shops, state and local authorities and others.

Among Public Citizen's objections to the settlement:


The time limits on benefits. For people not planning to use Carfax services within three years of the settlement's approval, the deal "would be essentially worthless," said Deepak Gupta, a lawyer for Public Citizen.


Inadequate compensation. Affected Carfax customers would get free or discounted title searches -- depending on when they used them -- or could get $20 off a vehicle inspection. But Public Citizen notes inspections cost about $100.


Weak disclaimer on the limits of the title searches. Under the settlement, Carfax must disclose that it "may not" have the complete history for every vehicle. That is misleading, Public Citizen says, because Carfax knows it doesn't have all records.


No letters sent to former customers detailing the settlement. Instead, notice of the settlement appeared once in USA TODAY and once in Investor's Business Daily. Also, Carfax sent e-mails only to customers from the previous year, and the e-mail sender was shown as [email protected]" -- not Carfax -- so some people may have assumed it was junk mail.

"Carfax should be held accountable for misleading its customers," said Public Citizen President Joan Claybrook.

A court hearing on Public Citizens' objections and final approval of the settlement is set for May 11. For information and a claim form, go to westcarsettlement.com.
 

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Another lawyer boondoggle. They're the only ones that will benefit from this, Carfax won't be any more reliable than it was before the lawsuit was served and the lawyers will be the only ones with more reliable cars - since the fees paid for their new ones.

Anyone that believed Carfax was/is *completely* infallible and based a decision to spend hundreds or thousands of their dollars on the report is at best irresponisble, at worst stupid.
 

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Aside from the lawyers getting their paycheck carfax gets hit with paying them.

imo class action suits aren't just about compensating consumers but holding a company accountable as well. Many times they know the individual incidents they commit will never get them sued on an individual basis. So they feel they have free license to screw consumers over. Class action lawsuits hold them accountable where it hurts, financially. Even if the lawyers get most of the money the company gets hurt too. That gives them some incentive not to be knowingly screwing their customers over.

Like when Paypal got sued awhile ago. The lawyers got most of the settlement. As one of paypals customers who got screwed by their tactics I'm not so much distressed I didn't get anything of value. Quite the contrary. I'm GLAD lawyers got those millions and paypal had to pay it to them!

I MUCH PREFER LAWYERS END UP WITH THE MONEY THEN THE COMPANY THAT SCEWED ME OVER GETTING TO KEEP IT!

If not for class action lawsuits companies would get away with nickel and diming us knowing that were never going to sue them over $20 or something like that. Turn it into a class action and suddenly it's worth a law firm pursuing! lol

Aside from requiring the lawyers to be paid, and some token amout given to claimants, the company usually agrees to cease and desist whatever it is they've been doing to screw consumers. I don't see that as a "boondoggle" outcome. It isn't all about the claimants in my mind.
 

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... Class action lawsuits hold them accountable where it hurts, financially. Even if the lawyers get most of the money the company gets hurt too. That gives them some incentive not to be knowingly screwing their customers over.
Not really, just gives them incentive to file bankruptcy if revenues really do drop (how many quit using Carfax due to this suit?) or raise their prices if they don't. Or they just close the doors altogether and go start another company screwing folks some other way or under a different name that fickle consumers don't recognize as the same "organization".
 

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A company or it's owners being forced into bankruptcy doesn't hurt them? huh?

Being force to close your business and start anew to continue your scamming doesn't set you back? lol

A company being called out and forced to cease and desist a certain practice, how is it that doesn't benefit their future customers???

If you get screwed for $35 you would rather the company get to keep it and get away with it, rather then it paying your lawyer to stick it to them?
 

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Not really, just gives them incentive to file bankruptcy if revenues really do drop (how many quit using Carfax due to this suit?) or raise their prices if they don't. Or they just close the doors altogether and go start another company screwing folks some other way or under a different name that fickle consumers don't recognize as the same "organization".
Just to be clear the finiancial hit I was talking about has nothing to do with future lost business revenue. It has to do with paying millions to a law firm to settle a class action suit brought against them! ;)
 

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prob with carfax is if it wasnt reported to insurance it wont come up

also it had me as the original owner of my 87 GN in 1999 up until this year when a previous owner in MD showed up (I have copies of it to prove it)
 

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I've got to say, anyone who thought carfax had complete and accurate records on every car is a bit loopy. It's simply one more resource to check prior to purchasing a car.

the only thing they promise if they eff up is...

The exclusive CARFAX Buyback Guarantee reduces the risk involved in buying a used car. If CARFAX fails to include a DMV-reported incident (salvage, fire, flood damage, odometer problems, lemon history) in a CARFAX Report, we may buy the vehicle back for the full purchase price.
So if they misled you and you purchased the car... they MAY buy it back for the full purchase price, then again they may not too. I think the later is the more likely outcome. Unless of course you have a lawyer representing you. lol

Carfax's gauarantee is like those lifetime warrantied auto parts you buy. Sure it's warrantied for life - and you'll be replacing every year for the rest of your life! Or until you get sick of it and buy a better part that comes with a 1yr warranty and lasts 10 yrs. lol

Oh they also go on to say...

While we'll never know everything about a particular car, a CARFAX Vehicle History Report combined with a test drive and an inspection by a qualified mechanic is a consumer's best protection when buying a used car.
They pretty much tell you they may not know everything about a particular car right on their "About us" page.
 
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