Vehicle Histories Said to Instill False Confidence
MSNBC News

A vehicle history report doesn’t protect buyers at all. In fact, it ends up hurting them because they think they’re being protected,” said Bernard Brown, a Kansas City, Mo., attorney who specializes in automobile fraud cases and works with numerous consumer groups on vehicle safety issues, commenting on CARFAX and Experian Automotive, provider of the Autocheck product. These companies represent that their reports show whether vehicles have sustained “major accident damage” which is “untrue.”

Representatives of these companies concede that their databases aren’t perfect but say the reports are a valuable tool for consumers in researching a vehicle’s past.

LAWSUIT OVER HISTORY REPORTS
My guess is that seven out of eight cars that have been in major wrecks will not show up,” said Brown. That is the central issue in a lawsuit filed recently in Tennessee on behalf of a Memphis auto dealer alleging that CARFAX markets its vehicle histories “in a manner which is unfair, false, deceptive and materially misleading.”

Among other things, the lawsuit filed by Memphis attorneys David McLaughlin and Frank Watson III on Oct. 28 alleges that the Fairfax, Va.-based company does not have access to police accident reports in 23 states and that its vehicle histories “therefore are incomplete, inaccurate and/or unreliable.”

Representatives of CARFAX and Experian Automotive both declined to state specifically where they get their data, citing competitive concerns.

NO WAY TO CROSS-REFERENCE
But after MSNBC.com contacted motor vehicle departments and public safety officials in Texas and California — two of the states identified as not providing records to CARFAX in the Tennessee lawsuit, verified that no accident data linked to unique vehicle identification numbers (VINs) is currently provided to vendors.

Critics of the vehicle history reports also charge that some auto dealers use them to sell previously damaged autos and trucks to unsuspecting buyers.

Dale Irvin, a Kansas City, Mo., attorney, said he worked with Brown on a case in which a local dealership used a clean CARFAX report to sell his clients a pickup truck that had suffered more than $8,000 in damage in a previous wreck. Although the dealer, according to our expert witness, would have spotted the evidence of the prior wreck and repairs, by having a clean CARFAX (report) the dealer felt free to misrepresent the vehicle,” he said.

One industry insider, who spoke with MSNBC.com on condition of anonymity, said that while dealers typically claim to have been fooled by a clean vehicle history report when buyers come back with evidence that it was involved in a serious accident, such explanations don’t wash.

“When they buy those cars at auction, they can see an overspray (indicating major body work) from a mile away,” the source said. “I don’t think any legitimate car dealer could stay in business if that was the extent of their knowledge.”