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Does Class Action CarFax Lawsuit Settlement Do Enough? Many Lawyers Don’t Think So!

A recent settlement of a nationwide class-action CarFax lawsuit claiming that this company’s “comprehensive” used car reports missed crash histories and insurance claims leaves a lot to be desired, according to lawyers who are urging eligible consumers to opt out of the agreement.

CarFax is regarded by many as being the best-known resource in the United States for consumers to research used car history. More than 29,000 car dealerships have CarFax accounts, which makes it especially easy for them to produce used car history reports for interested buyers, according to a story in the Sun-Sentinel.

However, these allegedly comprehensive CarFax reports have missed vital information in certain instances like a case involving a Florida doctor. Dr. Roxanne Jeffries bought a used Jaguar convertible in 2002 at a Palm Beach County dealership after a CarFax report indicated no record of car accidents, or flood or frame damage.

$16,000 Worth of Damages!

After the car began to overheat and experience other problems some three weeks later, Jeffries and her husband researched the Jaguar on the Internet. They found that it had been a head-on car accident nearly a year before she purchased it. That accident resulted in $16,000 worth of damages!

CarFax reached a settlement last month pertaining to a class action lawsuit alleging similar missing information in other vehicle history reports. But the company is not going to give back money to the millions of customers who had bought CarFax history reports before October 27th of last year.

Instead, eligible customers who file a claim by May 27th of this year can receive a free or discounted used history report or rather choose to get a 20% discount on an inspection for any vehicle researched with a CarFax report. According to the story, these inspections typically cost around $100.

This CarFax lawsuit settlement has upset many attorneys. They say it makes no sense that CarFax is going to settle with people by giving them free or used car history reports which may lack important information. They add that CarFax has limited access to insurance and accident reports and is unable to verify all information in these reports.

Even the consumer attorney who helped negotiate the CarFax lawsuit settlement seemed less than ensued with the result. William Federman said the CarFax lawsuit settlement was the best option given the “tough situation,” and yet urged consumers to opt of it if they had bought cars with clean CarFax reports and are now experiencing problems with them.

Consumers must opt out of this CarFax lawsuit settlement in writing by March 13th. If they fail to do so by this date, they will lose the right to sue for any personal injuries that result from defects in any vehicles claimed to be clean by CarFax reports.

Many consumer attorneys have argued that CarFax is basically escaping a situation scotch-free in which they had been grossly overselling their used car history reports, which usually range around $20 according to the story.

CarFax Denies Such Claims

Larry Gamanche said that the company never implied that the report is the only tool necessary for a prospective used car buyer. Gamanche added that the company urges people to get a mechanic inspection before purchasing a used vehicle.

According to the story, CarFax and its main competitor AutoCheck create their used car history reports from state motor vehicle departments, police and fire departments, rental companies, and auto salvage and auction businesses. The story says that these companies have historically not had access to insurance claims.

This can prove especially dangerous as the Jeffries case and other estimations reveal. According to a National Insurance Crime Bureau estimation cited in the story, unethical salvage operators are currently cleaning up and selling anywhere from 250-600,000 cars damaged by floods in 2005 as being undamaged.

Consumer fraud attorney Bernard Brown further added in the story that if a dealer was selling a Hurricane Katrina-damaged vehicle, he would estimate that there was a 90% chance that it would not show up in a CarFax report!

The story adds that U.S. Senator Trent Lott has said that he plans to reintroduce a bill which would let the public see vehicle identification numbers (VIN) of all cars declared as total losses by insurance companies.

If you have purchased a used car which you feel was damaged despite what a used car history report may have said, speak to a lemon law lawyer in your area who can assess your situation.