FTC Begins Sending Refunds to Car Buyers in Vroom Settlement

The Federal Trade Commission (FTC) has begun sending more than $934,000 in refunds to consumers after reaching a settlement with online used car dealer Vroom in July.

The refunds will compensate consumers who bought cars and were harmed Vroom’s alleged violations of the law, which included misrepresenting that it thoroughly examined all vehicles before listing them for sale, failing to obtain consumers’ consent to shipment delays or provide prompt refunds, failing to provide required information to consumers during the purchase process, and failing to provide warranty information, the FTC said in a Thursday (March 13) press release.

The settlement reached in July required Vroom to provide the money to compensate consumers, stop misleading consumers about inspections or shipping, and provide the required disclosures, per the release.

When announcing a proposed settlement in July, Samuel Levine, who was director of the FTC’s Bureau of Consumer Protection at the time, said in a press release: “Vroom promised the fast deliveries of thoroughly inspected cars, but sped right past compliance. Online car dealers and other Internet sellers must provide required disclosures just like any brick-and-mortar businesses that comply with the law.”

A Vroom spokesperson told PYMNTS in July that the company was pleased to have reached a final resolution of the matter as part of the wind-down of its used vehicle dealership business.

“The FTC’s allegations relate to pandemic-era challenges that arose in the Company’s discontinued ecommerce operations,” the Vroom spokesperson said in an emailed statement. “Under the settlement, which we previously disclosed in our SEC filings, the Company admitted no wrongdoing and agreed to pay a total of $1 million in customer redress and abide permanently by an injunction.”

The FTC said in June that its lawsuits resulted in over $324 million in refunds to consumers in 2023. That total includes money returned to consumers as a result of all FTC cases, whether the refund program was administered by the FTC, other federal agencies or the defendants, the agency said in its annual report on refunds.

While Vroom wound down its eCommerce platform for buying and selling used vehicles in January 2024, the company continues to own and operate indirect automotive lender United Auto Credit Corp. (UACC) and automotive retail digital services provider CarStory.