Business ProfileforTexas Direct Auto Powered by Vroom

On December 13, 2023, Vroom and dba Texas Direct Auto entered into an Agreed Final Judgment and Permanent Injunction with the Texas Attorney General’s office. This agreement settles prior allegations that the business misrepresented and failed to disclose significant delays in transferring clear title and obtaining vehicle registrations.  The State also alleged that the business had misrepresented and failed to disclose vehicle history and condition and terms of financing and approval, all violations of the Texas Deceptive Trade Practices Consumer Protection Act- Consumer Protection Act, Tex. Bus. & Com. Code §§ 17.41-17.63 (“DTPA”).

Under terms of the Agreed Final Judgment and Permanent Injunction, Vroom, whether acting directly or through any trust, corporation, division, or other devise, shall be restrained from engaging in the following acts or practices listed below with Retail Consumers:

• Advertising as available for sale or selling a vehicle until Vroom is in Possession of Title for the vehicle. This provision does not apply to vehicles advertised by Vroom on behalf of Third-Party Sellers, provided the advertising Clearly and Conspicuously distinguishes between Vroom's vehicle listings and a Third-Party Vehicle Listing, and provided that Vroom has obtained contractual assurances that the Third-Party Seller is in Possession of Title for the listed vehicle.
• If Vroom advertises a Vehicle Inspection and Reconditioning Process, misrepresenting or failing to disclose the items checked during the Vehicle Inspection and Reconditioning Process.
• If Vroom advertises a Vehicle Inspection and Reconditioning Process, misrepresenting or failing to disclose safety, mechanical, electrical and structural issues discovered by Vroom during the Vehicle Inspection and Reconditioning Process that are not repaired.
• Failing to Clearly and Conspicuously disclose frame or flood damage on the vehicle in the advertisement and listing.
• Failing to Clearly and Conspicuously disclose on the vehicle's listing page significant cosmetic damage that will not be repaired as part of Vroom's Inspection and Reconditioning Process.
• If Vroom advertises that a vehicle has an accident-free vehicle history report from a vehicle history reporting service, failing to (a) Clearly and Conspicuously disclose that the accident-free history is based on the information provided by that reporting service as of the date the vehicle was listed for sale; and (b) Clearly and Conspicuously disclose that such reports do not guarantee that the vehicle is accident-free.
• Failing to maintain processes to apply for the transfer of vehicle title to the purchasing Retail Consumer as required by Texas statute. This provision applies to vehicles sold through Vroom's Texas dealer license, and also applies to Retail Consumers residing in Texas at the time the sales agreement is executed.
• Failing to issue refunds or payoffs for vehicles in connection with a Retail Consumer vehicle return or a Retail Consumer vehicle trade-in by Vroom within thirty (30) days of Vroom being informed that the vehicle has been picked up by Vroom or its supplier.
• Failing to Clearly and Conspicuously disclose before executing a sale that obtaining Special Temporary Tags through the Texas Department of Motor Vehicles statutorily requires a minimum insurance policy that is greater than the amount the out-of-state consumer is required to possess under their home state's vehicle insurance laws. This provision only applies if Special Temporary Tags are available to be obtained by or for the out-of-state consumer, and only in instances where the State of Texas vehicle insurance policy minimum is indeed greater than an individual consumer's respective state vehicle insurance policy minimum.

IT IS FURTHER ORDERED that the State of Texas shall have judgment against Vroom, jointly and severally, in the total amount of $3,000,000 as follows:

1. $2,000,000 in civil penalties pursuant to DTPA section 17.47(c)(1); and B. $1,000,000 in attorneys' fees.

The agreement was for settlement purposes only and should not be considered as an admission of guilt or finding of violation of the law.

For more details, you may visit https://www.texasattorneygeneral.gov/