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October 19, 2012 / Alison Wilson

Settlement Reached in Consumer Fraud Class Action Against CarFax

A preliminary settlement has been reached in the consumer fraud class action lawsuit against CarFax for failing to properly disclose the limitations of Carfax Vehicle History Reports.  On July 31, 2012, CarFax agreed to settle the class action, offering vouchers for two free CarFax reports or a $3 cash payment to each affected customer.

The lawsuit began when Carfax was accused of hiding the limitations of its “CarFax” reports.  CarFax purports to conduct vehicle accident report searches for  vehicles on a nationwide basis in order to give purchasers information about whether a particular vehicle has been in an accident.   The plaintiffs asserted that this was false and deceptive because Carfax does not and cannot perform searches in twenty-three states across the U.S. given that it does not have access to accident reports in those states.

Under the terms of the settlement agreement, customers who purchased a Carfax Vehicle History Report directly from Carfax in Ohio, Oklahoma, Tennessee, or Texas at any time from October 1, 1998 through December 31, 2007, or in North Carolina at any time from May 1, 2001 through December 31, 2007, or in California at any time from February 17, 2002 through December 31, 2007 may qualify for settlement.

Class members who qualify for settlement will receive a voucher for up to two free CarFax Vehicle History Reports if redeemed within one year.    Class Members can also elect to convert the Settlement Voucher into $3 cash, but only $650,000 is available for conversion and they will be handled on a first-come, first-served basis.  Under the terms of the Settlement Agreement, CarFax has also agreed to change certain online disclosures and the details of its on-line contracting process in effect at the commencement of the lawsuit.

The final hearing on the settlement is scheduled for February 21, 2013. At the final hearing, the court will review the proposed settlement, and if approved, will authorize the parties to begin the settlement and claims-administration process.

If you feel you have been the victim of consumer fraud, please contact Khorrami, LLP for a confidential consultation.

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