SACRAMENTO, Calif. — The California New Car Dealers Association has amended its May 2015 lawsuit against TrueCar. The modification asks the court to declare that the Santa Monica-based vehicle-buying site continues to be in noncompliance with California Vehicle Code sections requiring vehicle dealer and auto broker licensure.
The amendment also alleges that TrueCar violates state and federal advertising laws with the “no surprise or hidden fees” promise it includes in its advertisements. The association claims the car-buying site fails to disclose to consumers that it receives a fee on each sale made through its website.
“TrueCar actually matches a buyer and a seller and gets paid for doing so,” said CNCDA President Brian Maas in the association's Jan. 5 press release. “This is brokering and TrueCar isn’t licensed as such.”
When the lawsuit was originally filed, TrueCar responded by saying that the California Legislative Counsel Bureau had previously determined that the operation of a web-based service such as TrueCar does not constitute autobrokering or operating as a dealer.
TrueCar continues to claim that they operate differently than traditional auto dealers. However, Patricia Glaser, trial attorney for Glaser Weil, the law firm that filed the litigation against TrueCar, the firm's business model "simply doesn't meet the legal structure in place to protect consumers."
“TrueCar must follow the law like the rest of us,” Glaser added.
On Dec. 23 2015, Brian Kabateck, president of the Consumer Attorneys of California, also filed a lawsuit against TrueCar on behalf of class action plaintiff who used the TrueCar network and a guaranteed savings certificate to purchase a vehicle. The lawsuit claimed that TrueCar should have been licensed as a dealer and an auto broker. Additionally, because the fee paid to TrueCar was not disclosed, TrueCar was unjustly enriched by the dealers who paid it, the complaint claims.
Originally posted on F&I and Showroom