CarMax settles consumer suit filed by Riverside County, other jurisdictions

RIVERSIDE, Calif. (KESQ) - A consumer protection lawsuit against CarMax stemming from deficient sales practices in Riverside County and other locations was resolved in a pretrial agreement requiring the corporation to pay $1.1 million in legal fees and penalties, as well as implement new policies to rectify shortcomings, prosecutors said today.   

Richmond, Virginia-based CarMax Auto Superstores Inc. was sued last year by the Riverside County District Attorney's Office, along with prosecuting agencies in Los Angeles, San Francisco, Santa Clara, Sonoma and Ventura counties. The case was heard in Santa Clara County Superior Court.

Earlier this month, the plaintiffs and defendant reached a settlement in the civil action. Riverside County's share of the $1.1 million payout will be $180,000, according to the District Attorney's Office.

The suit arose following multiple consumer complaints alleging CarMax dealerships had regularly failed to properly handle registration transfers and ownership filings in connection with used car sales, prosecutors said.   

Sales reps were specifically not complying with the Department of Motor Vehicles' requirement to complete new registration filings within 30 days from the time of a sale, according to the D.A.'s office. Additional problems had been documented with respect to certificates of ownership.

Under the settlement, CarMax "agreed to implement and maintain enhanced business practices,'' the D.A.'s office stated.   

"These measures include placing a sales hold on vehicles when the dealership does not have possession of the title or a clear ability to obtain it within the required timeframe, completing necessary smog checks or VIN verifications prior to sale, maintaining sufficient staff to process ownership transfers and designating a senior-level manager to oversee compliance,'' the agency said.  

CarMax did not make any admissions as part of the settlement, and prosecutors said the corporation has already initiated corrective measures.   

CarMax issued a statement saying: "The timeframe covered by this matter includes periods during the COVID-19 pandemic, when vehicle title processing was impacted industrywide by disruptions, including DMV closures and process changes, third party processing backlogs, and reduced staffing, which were outside of CarMax's control. During and since that time, we have strengthened our systems, processes, and oversight to better support timely title delivery, and we remain focused on continuously improving the systems and processes that support our customers."