The Texas attorney general's office is suing Vroom, an online used-vehicle retailer, for allegedly misrepresenting and failing to tell customers about holdups in transferring vehicle titles and obtaining registrations.
The deceptive trade practices lawsuit, filed this week by Texas Attorney General Ken Paxton, claims Vroom "burdened thousands of customers" by not making them aware of document processing hiccups.
The lawsuit also alleges Vroom misconstrued the history, condition and finance terms of vehicles it sold. Vroom is also accused of mismanaging its pandemic-era growth to a point that company procedures have become ineffective, according to the suit.
In the last three years, consumers "filed nearly 5,000 complaints with the Better Business Bureau and Office of the Attorney General of Texas" over these alleged issues, according to the lawsuit. About 4,000 of those complaints were made in the last 12 months, it said.
Vroom did not comment on the specific allegations, but said it has worked with the Texas attorney general's office to address issues raised in the lawsuit.
"We are disappointed the Attorney General felt the need to take this action but intend to continue addressing these concerns and improving our operations to ensure a hassle-free experience for our customers," the company said in a statement.
The lawsuit specifically claims Vroom is "cutting corners" and "turning over their customer-sourced vehicles so quickly that they are reselling vehicles" before they obtain proper titles.
Several customer accounts laid out in the lawsuit describe instances in which Vroom did not register changes in ownership in a timely manner, leaving them with expired temporary tags and no proof they own the vehicle they bought.
The lawsuit also cites instances in which people bought a car from Vroom, only to find it fraught with mechanical issues.
One Texas consumer reported his delivered vehicle had several problems: a damaged tire and rim, a cracked spoiler and windshield, missing bolts and evidence of a previous accident, according to the lawsuit. He spent "several hours on the phone for over a month" attempting to get a refund and his trade-in back from Vroom, the lawsuit alleges.
Texas wants Vroom to pay up to $10,000 for each alleged violation of the state's Deceptive Trade Practices Act, according to the lawsuit. The state wants the company to pay more — $250,000 per violation — if it involved a customer older than 65.
Vroom has faced scrutiny in other states for how it handles title transfers.
In January, the Florida Department of Highway Safety and Motor Vehicles filed an administrative complaint against Vroom, citing 47 cases in which the company allegedly didn't deliver titles to consumers in 30 days.