FTC Investigating GM Over Certified Used Car Recalls

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The Federal Trade Commission is investigating General Motors because some of its dealerships advertised certified used vehicles that hadn’t received recall-related repairs.

GM said in a U.S. Securities and Exchange Commission filing last week that it received a notice from the FTC on June 3 and that it’s cooperating with the agency.

“We received notice of an investigation by the Federal Trade Commission concerning certified pre-owned vehicle advertising where dealers had certified vehicles allegedly needing recall repairs,” GM said in the filing.

A GM spokesman declined to discuss the matter beyond the statement in the filing. The FTC declined comment, citing the ongoing probe.

Federal law prohibits the sale of new cars that have unfixed recall repairs, but there is no law preventing used cars from being sold.

Under CPO programs, participating dealers can certify used vehicles that meet certain age and mileage requirements and pass multipoint inspections, parameters set by the automaker.

GM’s CPO sales rose 21 percent through June to 237,059 units.

The investigation by the FTC, which regulates deceptive advertising, was listed in GM’s filing among several ongoing probes related to the recall of nearly 30 million vehicles last year for various defects. The most notable was a recalled faulty ignition switch in older-model small cars that has been linked to 124 deaths.

GM said in the filing that investigations are ongoing by the SEC, the U.S. Attorney’s Office for the Southern District, Transport Canada and 50 state attorneys general.

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