The Federal Trade Commission is investigating the extent to which automakers and dealers buy back "lemons" and resell them without disclosing their defects to subsequent buyers.
The FTC said this week it was asked to act by consumer groups who want an inquiry into whether new federal rules are necessary to regulate the alleged practice of reselling "lemon buybacks" 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.
In petitions to the FTC, the group Consumers for Auto Reliability and Safety and other consumers organizations alleged that "lemon laundering" is defeating laws enacted to protect consumers.