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Lawsuit Challenges Carfax Claims

May 4, 2004

Carfax • Public Citizen Objects to Carfax Settlement • CARFAX: Not Always All the Facts • How Can Used Car Buyers Protect Themselves? • CARFAX Settles Class Action Lawsuits • How To Contact CARFAX • CARFAX History --- Consumer Complaints • "Unlimited" Service • Inaccurate Reports • Refund Policy • Advertising Claims • Sellers' Complaints

A class-action lawsuit against Carfax claims the company doesn't have access to police accident data in 23 states -- and therefore doesn't live up to its promise of disclosing hidden problems in used vehicles.

Carfax claims its search service is "your best protection against buying a used car with costly, hidden problems." But in their suit, Tennessee attorneys Frank Watson and David McLaughlin charge that Carfax's ads promise more than it can deliver. Carfax fails to disclose the limitations of its database, they said.

McLaughlin and Watson charge that auto dealer Mid-South Motors purchased a 1995 BMW 525i from another wholesaler in 2002 after buying a CARFAX report that showed no “salvage” brands and no police accident or damage disclosure records.

A subsequent check of a database maintained by the National Insurance Crime Bureau (NICB) revealed that the BMW had been declared a “total loss” three separate times after accidents in New York, Florida and Georgia that were reflected in police accident records, according to court documents.

Similar incidents have been reported to ConsumerAffairs.com. "My daughter totaled a car that was resold to me by my insurance company and I ran It and It came back clean," said Dennis of Destrehan, La., in a recent complaint.

Another consumer, Mitchell of Newport News, Va., said he paid $38,000 for a car that got a clean bill of health from Carfax, only to be told by police that it was stolen.

Critics also charge that some unscrupulous dealers are hiding behind a clean Carfax, using it to pass off damaged cars to customers, then claiming ignorance if the consumer complains.

Carfax says its information is as timely and complete as possible, but insists that it has always suggested that customers should use the Carfax history in combination with a complete inspection by a mechanic.

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