Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Suit Alleges Carfax Reports Are Incomplete and Unreliable

May 6, 2004

MEMPHIS, Tenn. -- Carfax Inc., provider of vehicle history reports, is being sued on the grounds that it fails to disclose the limitations of its database. The class action, still in its infancy, claims that Carfax’s information is unreliable because the company can’t access public accident records in 23 states.“Of the four million-plus accidents each year, we believe it’s missing the vast majority,” said David McLaughlin, attorney for the plaintiffs. “Yet it is convincing people that it can tell them whether or not their cars have been involved in accidents.” Carfax seems to be hoodwinking the consuming public about the abilities of its service, said McLaughlin.The plaintiffs include car buyers and dealers who have purchased vehicles with clean Carfax reports and later discovered that their vehicles had in fact been in accidents. Some of them found out about previous damage and repair to their vehicles when they took them to a mechanic. Auto repair shops have also come forward to testify of the discrepancies.“We’ve always suggested customers use a Carfax vehicle history report in combination with inspection by a mechanic,” said Carfax’s Larry Gamanche to CBS News. “Listen, there are literally thousands of accidents that happen every day that never get reported.”But McLaughlin believes the unreported accidents are inconsequential. “Of the four million reported accidents, how many does Carfax pick up?”
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