Ftc Launches Probe Of ‘Lemon’ Practices

The Federal Trade Commission is investigating the extent to which auto makers and dealers buy back “lemons” and resell them without disclosing their defects to subsequent buyers.

The FTC said Monday it was asked to act by consumer groups who want it to examine whether new federal rules are necessary to regulate the alleged practice of reselling “lemon buy-backs” to unsuspecting consumers.

The commission is seeking information from the public about the practice.

Lemon laws in the 50 states and the District of Columbia require that consumers get replacement vehicles or refunds if problems with a new car cannot be repaired after a specified number of attempts over a given period.

It is those cars that the FTC said are resold as used cars.

Thirty-six states and Washington, D.C., already require automakers and dealers to inform consumers that “lemon buy-backs” were repurchased because of defects discovered under state lemon laws, the FTC said.

Some states require disclosure for all buy-back cars. Others require it only in certain cases. Some states ban the resale of cars with serious safety flaws.