Vroom, the former used car sales website which halted vehicle sales in January 2024, has agreed to a proposed settlement with the FTC over allegations the company misrepresented that it had examined all vehicles before listing them for sale, failed to obtain customers’ consent to shipment delays and failed to provide prompt refunds when cars were not delivered on time.

Vroom, agreed to pay $1 million to consumers.

In its complaint, the FTC alleged that Vroom violated the prohibition against Unfair or Deceptive Acts or Practices (Section 5(a) of the FTC Act, 15 U.S.C. § 45(a)) by stating that each vehicle for sale had had a thorough inspection before being listed on the company website. In reality, the FTC said, vehicles had not received such inspections.

The FTC also alleged that the company violated the Mail, Internet and Telephone Order Rule, which states, among other things and subject to certain exceptions that sellers must deliver an item within the timeframe clearly and conspicuously stated in the seller’s solicitation or within 30 days of an order being placed if not disclosed. Vroom’s advertisements represented that vehicles typically arrive within 10-14 days. In numerous instances, Vroom failed to ship orders within the timeframe stated in Vroom’s advertisements. The company also did not offer consumers the opportunity to consent to delays or to cancel their orders.

In addition, the FTC alleged that Vroom failed to prepare, fill in or display a Buyer’s Guide for each vehicle offered for sale, as required by the Commission’s Used Car Rule .

The FTC also contended that Vroom failed to display the text of their warranty in close proximity to the vehicle being offered for sale, in violation of the Commission’s Pre-Sale Availability Rule.

The Vroom settlement makes clear that the FTC, despite the delays in the effective date due to litigation and a stay of the Combating Auto Retail Scams Rule (“CARS Rule”), will continue its scrutiny of motor vehicle dealer sales practices under existing authority.

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