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 have received the intended disclosures. In their petition, the consumer groups alleged 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 alleged 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 endorsed nor supported the views expressed in the petition. Nonetheless, the Commission and its staff were concerned that some consumers may not have received important, material information about the used vehicles that they are purchasing. In order to determine the facts in this matter, the Commission conducted a public inquiry on the questions and issues raised in the petition.
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