Attorney General William Tong on Tuesday announced a $1.5 million settlement with online used car dealer Carvana following hundreds of consumer complaints involving extended delays in title and registration documents, delayed payments to sellers, and deceptive representations of car conditions and features, among other complaints.
Today’s settlement establishes a $1 million consumer restitution fund, in addition to a $500,000 penalty to be paid to the state, of which $250,000 will be suspended if Carvana complies with all terms of the settlement.
The settlement requires Carvana to come into and remain in compliance with Connecticut laws, specifically requiring that the company cannot sell vehicles in Connecticut unless it provides valid title and registration documents at the time of sale.
Carvana will further be required to strengthen its customers service systems, including appointing a direct contact for the State to expedite resolution of Connecticut complaints. Carvana cooperated fully with the state’s investigation.
If you purchased a used vehicle from Carvana after January 1, 2019 and incurred fines, penalties or out of pocket expenses due to a delayed transfer of title and registration, an untimely loan payoff, or if Carvana misrepresented the features, specifications and conditions of your vehicle, you may be entitled to restitution. Consumers should submit claims in writing to Carvana at [email protected].
This settlement has been filed in Hartford Superior Court and is subject to court approval.
“Today’s settlement puts money back in the pockets of Carvana customers who were wronged. This is a company that grew faster than it could manage, compounded by the chaos of the pandemic. Carvana made promises it simply could not keep, and its customers paid the price. We saw hundreds of complaints regarding long delays in title and registration, payment issues, inaccurate vehicle representations and unacceptable customer service. In addition to restitution and penalties, this settlement requires Carvana to come into compliance with all Connecticut laws. We’re going to be watching closely to ensure they do right by Connecticut customers going forward,” said Attorney General Tong.
“It’s simple: Consumers should expect to receive what they pay for, whether it’s a car or something else,” said Department of Consumer Protection Commissioner Bryan Cafferelli. “While the pandemic placed added strain on many businesses, it is no excuse for making promises you can’t keep. We are happy Carvana is taking steps to rectify this situation. Thank you to the Office of the Attorney General for their attention to this matter.”
“Thank you to the Office of the Attorney General for investigating these complaints and for coming to the aid of those who were wronged,” said Department of Motor Vehicles Commissioner Tony Guerrera. “Purchasing a car is a significant decision, and it’s essential for residents to research the vehicle and the dealership.”
Connecticut launched its investigation into Carvana in January 2022, following hundreds of complaints to the Office of the Attorney General, Department of Consumer Protection and Better Business Bureau. Many consumer complaints related to extended delays between delivery of vehicles and receipt of Connecticut registration documents. Carvana represented that it handled the title and registration process, but in many cases the registration process took months to complete. Because of the registration delays, Carvana would sometimes provide consumers with a succession of out-of-state temporary registrations. In other instances, consumers were forced either to park their cars or risk driving unregistered vehicles. Other consumers complained about delays in receiving payments or loan payoffs for vehicles Carvana purchased or took in trade, forcing consumers to continue making payments on vehicles they no longer possessed. Some consumers complained about third-party warranty products offered by or through Carvana, and some asserted that their vehicles did not match the advertised condition or features. Almost all of the complaints stated that consumers had difficulty getting Carvana to respond to problems.
The COVID pandemic significantly stressed Carvana’s systems. The company experienced explosive growth due to the increased demand for used cars, which resulted in even longer delays in titling and registration.
Excerpts from Connecticut Consumer Complaints
- “Carvana sold me a used vehicle with undisclosed issue, body damage and replaced body parts. Carvana was notified within 7 days of the issues and refuses to take the car back.”
- “I purchased my Nissan Rogue on 10/31/21 and I’ve been waiting on Carvana for the registration. Submitted all documents and they are saying there was a reporting discrepancy with the mileage on the vehicle. Been pulled over countless times due to the registration. Contacted Carvana and they are not giving assurance as to when this will be taken care of.”
- “I arranged to sell my vehicle a 2012 Honda CR-V to Carvana. The offered sale price was $13,768. A salesperson came to my house and assessed the vehicle where the price was confirmed. An agreement was signed by both parties for the vehicle to be picked up by a Carvana employee/subcontractor via tow truck. A wire transfer was initiated with the banking information I had provided. The wire transfer failed to go through. Carvana cut a check and sent it to my house. I deposited the check at the clerk counter on February 23, 2022. The check failed to clear. I have made several calls to Carvana’s corporate office where they refuse to transfer my call to a supervisor, manager, or accountant.”
- “I’m continuing to have issues with Carvana when it comes to registering my vehicle. They forgot to provide two documents when I purchased the vehicle in Oct, 2021. A limited power of attorney and an odometer disclosure document. I have repeatedly mailed these documents over a course of months to Carvana and uploaded them via my Carvana online portal. Each time I reach out I get a different response. Some reps will say they received them and others will say they have not. It has been almost 6 months and the vehicle is still not registered. I don’t know what else to do at this point and need further assistance. I have no idea when my car will ever be registered.”
- “Purchased a vehicle on 5/13/23 and realized that the car does not have automatic locks and manual roll down windows. On 5/14/23 at 8pm ET, I cancelled the transaction due to this because of safety concerns. Never signed a contract for the vehicle. Contacted Carvana for $1990 shipping fee to see if this could be reimbursed…car had not shipped yet. Refused to refund the shipping fee because it was over 24 hours (approx. 32 hours when I cancelled purchase). Car went immediately back online for sale when the purchase cancelled.”
Assistant Attorneys General Brendan Flynn and Joe Gasser, paralegal Casey Rybak, investigator Caylee Silva, and Deputy Associate Attorney General Michael Wertheimer, Chief of the Consumer Protection Section, assisted the Attorney General in this matter.