by Mona Gallagher

Created on: October 11, 2007   Last Updated: November 07, 2008

Over the years, consumers placed their confidence in CARFAX, trusting that they delivered accurate information in their vehicle history reports. Consumers thought of CARFAX as a friend and millions of customers bought vehicles based on their vehicle history reports.

Consumer confidence was shattered in 2003 when a class action lawsuit was filed against CARFAX. The lawsuit charged that CARFAX did not, in fact, provide complete and accurate information in its vehicle reports. CARFAX later acknowledged that fact.

CARFAX is a well-established company;it hung up its business shingle in 1986 partnering with the Missouri Auto Dealership Association. They supplied vehicle history reports to businesses and later to individuals. By 1993, CARFAX was receiving information from almost all 50 states.

In 1996, the company went online and anyone who paid their fee could access instant history reports from their website. Consumers relied upon the vehicle reports to alert them to previous accidents, lemon recalls, and other pertinent information that let the customer/client base know that the car was sound and roadworthy.

The company made great claims of what it could do for customers. The main sales pitch was that a CARFAX vehicle report would help the consumer make wise decisions in buying used cars.

Class action lawsuit

The lawsuit charged that CARFAX did not provide complete and accurate information in its vehicle reports. CARFAX later acknowledged that it only received vehicle reports from selected states.

The company allegedly didn't disclose that it doesn't access records from more than 20 states. Attorneys said the information is very often "incomplete, inaccurate and unreliable."

The most damaging charge came from a report on a BMW. An automobile dealer purchased a BMW 525i from a wholesaler in 2002. A CARFAX report was obtained and it revealed no salvage brands and didn't contain any accident or damage disclosure.

After checking the automobile with the National Insurance Crime Bureau, (NICB) it was found that the BMW had been declared a total loss on three different occasions in three different states. The accident reports were available and documented in police reports from the three states. How could CARFAX not know what 3 states and the NICB knew?

Where do we go from here if CARFAX reports are unreliable?

What's the alternative for consumers who once relied on CARFAX? You can buy certified cars that come with inspection reports or you can have the car inspected at your own expense.

A physical car inspection should reveal:

*How the vehicle's mechanical and electrical systems are operating.

*Has the vehicle has been wrecked, extent of the damage and if the repairs were done correctly.

*Is the vehicle's wear and tear consistent with the odometer reading?

*Cost to make needed repairs.

A physical car inspection will tell you more than a CARFAX report will and its more reliable.

The settlement in the CARFAX lawsuit is a bitter dispute and consumers feel cheated. CARFAX is obligated to give free vehicle reports or help pay for inspection of the customer's cars.

I have to wonder why a consumer would choose a free vehicle report that was flawed from the beginning.

Source:

http://consumeraffairs.com

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