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Carmax, one of the country’s largest car retailers, unlawfully sells vehicles that don’t meet emissions standards, and fraudulently completes title certificates to unlicensed dealers, a new nationwide class action lawsuit alleges.
Plaintiff Alexandra Reid filed the class action lawsuit against Carmax Auto Superstores, Inc and its west coast outlet Monday in a California federal court, alleging fraud and violations of California business law.
The class action alleges Carmax engaged in fraudulent conduct to sell cars as retail to unlicensed dealers under the guise of a wholesale dealer-to-dealer transaction.
Reid says she became a victim of the alleged “fraudulent scam” when she purchased a vehicle in May 2020 from private seller, Isaac Lee, the partner to unlicensed dealer Sandra Wellington, to whom CarMax allegedly unlawfully sold the vehicle to.
According to the claim, the car was mechanically unable to pass the California-mandated smog test when acquired by CarMax. Therefore it could not be sold as retail, and only sold as wholesale to a licensed dealer. However, Reid says CarMax unlawfully transferred the car to Sandra Wellington of ‘Genuine Automotive Enterprises’ who did not possess nor produce a valid dealer license.
“CarMax fraudulently filled out the dealer-only section on the back of the certificate of title to fraudulently complete the transaction as if it were wholesale.”
Reid says CarMax then failed to file the required paperwork, and instead failed another type of paperwork.
“This muddled the facts of the transaction, making it appear as retail, and therefore disguising its illegal nature,” the class action says. “This kept the unlicensed dealers off of the DMV’s radar and able to successfully victimize Plaintiff.”
When Reid bought the car from Issac Lee, she says she was presented with a fraudulent smog certificate dated May 23, 2020, as part of the sale. Within 20 miles of the purchase the check engine light came on prompting her to take it to get checked.
“Realizing that she was the victim of fraud, Plaintiff immediately filed a claim with the California Bureau of Automotive repair who found an illegal smog check had been obtained and cited the responsible mechanic.”
Reid says she promptly alerted CarMax that they had illegally sold the car, and alerted it that this had happened with multiple vehicles, as she had discovered on Facebook. She says CarMax ignored her complaints and simply told her that they dealt with the matter “internally.”
“CarMax failed to uphold its legal obligation to report any suspected unlicensed dealing even after Plaintiff gave them proof they had intentionally aided unlicensed dealers, and conducted a fraudulent smog check,” the class action says.
Reid is looking to represent anyone in the United States who purchased a car sold by CarMax via fraudulent means to unlicensed dealers, plus a California subclass. She is suing for violation of Unfair California Competition Law, Common Law Fraud and Unjust Enrichment .
Meanwhile, CarMax has defended itself before against allegations that it knowingly sells defective cars.
In 2019, CarMax defended the claims, saying the customer who brought the car-defects class action lawsuit hadn’t presented evidence to back up his claims that the car dealership tried to pass off defective cars as functional ones.
What do you think of the allegations against the car retailer? Let us know in the comments!
The plaintiff is represented by Todd. M. Friedman of the Law Office of Todd M. Friedman, PC.
The CarMax Fraudulent Sale Class Action Lawsuit is Alexandra Reid v. Carmax Auto Superstores, Inc., Case No. 2:21-cv-04815-MCS-MAR, in the U.S. District Court Central District of California.
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12 thoughts onCarMax Fraudulently Dealt in Cars That Don’t Meet Emission Standards, Class Action Lawsuit Says
I purchase a car from carmax in April 2022 that had emission issues. Which cost me an additional 4k for a new engine. How can I be included in this lawsuit