On November 8, 1995, a number of consumer groups filed a petition asking the Commission to look into whether vehicles bought back under state lemon laws are being resold without disclosing to subsequent purchasers that the vehicles had been bought back. The state laws vary as to whether disclosure is required and, if so, how this disclosure is to be made. Despite state attempts to protect subsequent buyers of the repurchased vehicles, some of these subsequent buyers may not be receiving the intended disclosures. In their petition, the consumer groups allege that auto manufacturers, their dealers and others are engaged in a pattern of conduct (which the petitioners term "lemon laundering") intended to conceal from used car buyers material information about the vehicle's safety and repair history. The petitioners also allege that this pattern of conduct often involves transporting the repurchased vehicles across state lines to avoid the operation of state law protections.
The Commission and its staff neither endorses nor supports the views expressed in the petition. Nonetheless, the Commission and its staff are concerned that some consumers may not be receiving important, material information about the used vehicles that they are purchasing. In order to determine the facts in this matter, the Commission is conducting a public inquiry on the questions and issues raised in the petition.
- Request for Comments Concerning Disclosure in the Resale of Vehicles Repurchased Due to Warranty Defects
- Notice of 30-Day Extension in Comment Period and Change in Date for Public Forum on Disclusres in the Resale of Vehicles Repurchased Due to Warranty Defects
- Conference Acceptance Letter (08/20/96)
- Preliminary Report: Resale of Vehicles Determined to be Lemons
- List of Participants: Public Forum on Vehicle Buyback Disclosures
- Public Comments
- Transcript of the Event