TrueCar, a vehicle-shopping site service, is being sued by 117 new-car franchises who claim they are victims of false advertising and unfair competition.
Basically, dealers say TrueCar is using false advertising to get customers through the door by offering a no-haggle experience free of negotiation when that isn’t the case. The lawsuit was filed Monday in U.S. District Court in New York, according to Automotive News.
Dealers associated with the lawsuit allege that TrueCar’s ads falsely advertise that customers who use the shopping service will receive a no-haggle price, without any negotiation. Plaintiffs say despite what TrueCar claims, the service “does not remove surprises at the dealership”. The lawsuit alleges that consumers will be “surprised to learn” the promised vehicle may not be in stock, and “may not be available at the advertised price or financing terms.”
The filing dealers aren’t currently associated with TrueCar, but some have used the service in the past. According to Automotive News, the dealers involved in the lawsuit say they’ve “lost sales and suffered injury to their goodwill and business reputation as a result of TrueCar’s false advertising claims.”
The plaintiffs say they’ve lost business because they can’t deliver on TrueCar’s false pricing and terms that consumers will find on its website. The lawsuit states that TrueCar “has intentionally set out to deceive the public.”
Automotive News attributes its information to Leonard Bellavia, the Mineola, New York, lawyer representing the dealers in the lawsuit. The suit reportedly seeks $250 million-plus and the plaintiffs are also asking the federal court to order TrueCar to stop using such advertising.
As of this writing, TrueCar had no immediate comment since it had not seen the specifics of the lawsuit yet, but a spokesperson told Automotive News the company may have more to say after reviewing the information.
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