Month: July 2016

For Immediate Release

Contact:

Maria McElwain (Blumenthal): 202-224-6452

July 14, 2016

 

BLUMENTHAL, SCHUMER, MARKEY, NELSON, DURBIN: FTC SETTLEMENTS ALLOWING USED CAR DEALERS TO ADVERTISE CARS WITH UNREPAIRED RECALLS AS ‘SAFE’ ARE ANTI-CONSUMER & ANTI-SAFETY

Recent proposed settlements between the FTC and used car dealers allow dealers to continue advertising used cars as certified and “safe” even if those vehicles have unrepaired safety recalls

Senators today called on FTC and NHTSA to redraft the proposed settlements to ensure consumers have the information they need to stay safe

[WASHINGTON, DC] – U.S. Senators Richard Blumenthal (D-CT), Chuck Schumer (D-NY), Edward J. Markey (D-MA), Bill Nelson (D-FL), and Dick Durbin (D-IL) today called on the Federal Trade Commission (FTC) and National Highway Traffic Safety Administration (NHTSA) to ensure used car dealers cannot advertise a car as ‘safe’ if it has an unrepaired safety recall. Recent proposed settlements between the FTC and used car dealers allow dealers to continue advertising used cars as certified and “safe” even if those vehicles have unrepaired safety recalls. The Senators today called on the FTC and NHTSA to redraft the proposed settlements to ensure consumers have the critical safety information they need when buying a car.

“Congress has long debated whether dealers should be allowed to sell used cars subject to open safety recalls,” the Senators wrote. “We firmly believe that the law should prohibit such sales, as it currently does for new cars with open safety recalls. These proposed settlements wade into this contentious public policy debate, and we believe they would establish an anti-consumer, anti-safety precedent with far-reaching policy implications. Accordingly, we urge you to work together, and in good faith, to leverage your respective agency’s expertise and redraft the proposed settlements so they ensure that consumers receive meaningful information regarding the safety of their potential used vehicle purchases and that public safety is not compromised.

The text of today’s letter is available here and below:

Dear Administrator Rosekind and Chairwoman Ramirez:

We write with serious safety concerns regarding the Federal Trade Commission’s (FTC) recent proposed settlements with General Motors Company, Jim Koons Management, and Lithia Motors Inc, regarding their failure to adequately disclose unrepaired safety recalls when advertising their used car inspection programs. The proposed settlements would allow dealers to continue to advertise used cars as “safe,” “repaired for safety issues,” and having been rigorously and extensively inspected, including that they are certified—a term that connotes safety—even if those vehicles have unrepaired safety recalls. As such, in their current form, these proposed settlements would fail to address the wrongdoing at hand.

We understand that, at our behest, your two agencies have discussed these proposed settlements. Nevertheless, we remain concerned that this important public safety and public policy matter has not received the heightened scrutiny it deserves. Congress has long debated whether dealers should be allowed to sell used cars subject to open safety recalls. We firmly believe that the law should prohibit such sales, as it currently does for new cars with open safety recalls. These proposed settlements wade into this contentious public policy debate, and we believe they would establish an anti-consumer, anti-safety precedent with far-reaching policy implications. Accordingly, we urge you to work together, and in good faith, to leverage your respective agency’s expertise and redraft the proposed settlements so they ensure that consumers receive meaningful information regarding the safety of their potential used vehicle purchases and that public safety is not compromised.

The National Highway Traffic Safety Administration (NHTSA) has publicly stated time and time again that all recalls are safety recalls that need to be fixed. In 2011, a spokeswoman for NHTSA said, “All safety recalls resulting from defects present an unreasonable risk to safety and we believe it is inappropriate to suggest that some defects are not risky enough to require repair.”[1] In a 2013 hearing, former Administrator David Strickland testified, “All NHTSA safety recalls address an unreasonable risk to safety and should not be ignored.”[2] In addition, NHTSA’s current FAQ on vehicle recalls explicitly states, “A recall is issued when a manufacturer or NHTSA determines that a vehicle, equipment, car seat, or tire creates an unreasonable safety risk or fails to meet minimum safety standards.”[3] There is no question that any vehicle with an outstanding recall is an unsafe vehicle.

In contrast to NHTSA’s longstanding position, the FTC’s proposed settlements would allow dealers to continue committing the same wrongdoing that was the impetus for the Commission’s actions. Car dealers would still be able to represent that a pre-owned vehicle is “safe,” has been “repaired for safety issues,” and has passed a “rigorous safety inspection” or to label a pre-owned car as being certified even when it is being sold with an unrepaired safety recall. A certified used vehicle with an unrepaired safety recall is inherently misleading. Perhaps more alarming, the proposed settlements would only require dealers to make a blanket statement that their rigorously inspected and certified used vehicles “may be subject to unrepaired recalls.” Consequently, this “disclosure” arguably amounts to nothing more than a legal disclaimer that could absolve dealers from their responsibilities and would likely do little, if anything, to meaningfully convey to consumers the existence of an open recall and dissuade them from purchasing such vehicles due to their safety risks.

The sale of any car with an unrepaired safety recall is a threat to public safety. We support the concerns raised in the comments recently filed by a number of consumer groups that no dealer should be able to advertise that a car is certified or any similar terminology connoting safety, if the car is subject to an outstanding recall.[4] Please report back by August 10, 2016 on how you intend to cooperate and work together to amend the proposed settlements and ensure that car dealers cannot mislead and deceive consumers about the safety of their prospective purchases.

Sincerely,

###

Forty years later, this reminds me when, as a citizen, I testified before the FTC in the early 1970’s for posting gasoline octane ratings on gasoline pumps against opposition from the oil industry and the voluntary standards organization ASTM.  The FTC Administrative Law Judge so shocked me by his obvious bias, that I turned to him while on the stand and blurted out: Whose side are you on?

Lou Lombardo

• • Universal Health Care

• • Community Health Centers

• • Prescription Drug Costs

• • Medical Research

• • Drug and Alcohol Addiction

• • Mental Health

• • Reproductive Health, Rights, and Justice

• • Public Health

• • Violence Against Women and Sexual Assault

• • Gun Violence Prevention” 

See https://demconvention.com/wp-content/uploads/2016/07/2016-DEMOCRATIC-PARTY-PLATFORM-DRAFT-7.1.16.pdf

On page 25 one can read:“Gun Violence Prevention

So what are Americans who are concerned with ending vehicle violence to do this election year?

Lou

The 2016 Democratic Party Platform has now been published.  On page 39 it addresses Gun Violence as follows:“Preventing Gun ViolenceWith 33,000 Americans dying every year, Democrats believe that we must finally take sensible action to address gun violence.”

See https://www.demconvention.com/wp-content/uploads/2016/07/Democratic-Party-Platform-7.21.16-no-lines.pdf

As I recently wrote, citing both historical and current statistics, vehicle violence is a greater problem.   And the prevention of vehicle violence is more feasible with government action:

As we in the U.S. approach our 4 millionth death from vehicle violence, we must remember that we still have no goal to end vehicle violence….So why does the President of the U.S.A. not adopt a Vision Zero Goal?  President Obama:  Meet Marianne Karth.  She has gathered 20,000 signatures on a petition to you to adopt a national Vision Zero Goal.  “Where there is no vision, the people perish.”  Proverbs.  See http://annaleahmary.com/  ” 

The August 2016 issue of Consumer Reports reaches a high point in covering important subjects to consumers.  See http://www.consumerreports.org/cro/index.htm?loginMethod=autoThis issue has an excellent article on seat belt safety.   See http://www.consumerreports.org/car-safety/fastening-seat-belts-3-seconds-that-save-lives/

On this 4th of July weekend when we celebrate our independence and freedom let’s recognize the value of information sources that help us choose wisely.

The Clinton and Kaine Campaign The Clinton – Kaine bus tour is currently going through the swing States of PA and OH.  These States are suffering from a loss of jobs in manufacturing including steel and autos caused, in part, by failed safety policies for decades.  If we had a national Vision Zero Goal, it could stimulate the use of specialty high strength steels and boost the economy by improving the demand for, and supply of, safer vehicles here in the U.S.A.

Lou

See Press release of life or death importance below.