FTC Sued For Approving Used Cars With Recall Defects

Auto Recall Car Crash Lawyer

The old adage, "it's too good to be true" comes to mind in the light the news that used cars sale representatives have been approved by the Federal Trade Commission (FTC) to sell used cars as certified, despite some of them having safety defects. Some of those defects include vehicles or parts under recall that have yet to be fixed. However, used car salespeople can still sell the cars as 'safe' or as subjected to 'rigorous inspection' vehicles just as long as they post a notice prior to the purchase of the vehicle stating that it may be under recall notice and by providing the buyer with the information to discover if the vehicle is under recall. 

CBS News listed that the defects may include exploding faulty Takata air bags in addition to other defects that can cause serious to fatal injuries such as, defective ignition switches, problems with the power steering, and damaged brakes. The FTC came to the decision during a settlement with General Motors (GM) and 2 used car dealers.

Opponents Of Recall Defective Car Sales

Cash 4 Junk Cars Sign

The National Highway Traffic Safety Administration (NHTSA) does not approve of the FTCs ruling. In fact, the FTC's agreement goes against NHTSA policy. The NHTSA's policy, which they unfortunately don't have the power to enforce, says that used cars must be inspected and fixed before being resold. 

Seconding the NHTSA's view on the issue, Rosemary Shahan, president of Consumers for Auto Reliability and Safety (CARS) said, “The FTCs reckless action will result in more people being killed and injured because of unsafe, defective used cars.” To back up their words with actions, Shahan’s organization is fighting along with a few Democratic senators, the Center for Auto Safety, and the U.S. Public Interest Research Group against the FTC. “It’s a dangerous and irresponsible abuse of the commission’s authority,” Shahan continued. Now the FTC is facing a lawsuit from the 3 organizations on the grounds of consumer safety.  

The legislative director for the Massachusetts Public Interest Research Group, Deidre Cummings also said to NBC News that, "The Federal Trade Commission is supposed to crack down on false and misleading advertising, but instead they are encouraging it. They should have protected consumers, but chose to protect reckless car dealers.”

How Defective Car Sales Affect The Auto Industry 

Michigan Car Crash Lawyer

Many view the FTC's decision as a change in the auto buying industry. This may lead to car dealers altering their policies to reflect monetary benefits for themselves instead of safety measures for the consumers. In fact some changes have already been made. Ford has already modified their policies to include recall defects such as the Takata airbag. Ford Dealers can now sell vehicles with faulty parts as 'certified' as long as the word 'safe' is not utilized at anytime in the sale. Used Ford buyers will then sign an agreement noting that they are aware of the safety issue and agree to be contacted by the Ford dealer once the replacement parts arrive. 

In defense of their new policy, Sara Tatchio of Ford Communications stated that, “The safety of our customers is our top priority. Our dealers must complete all recalls when parts are available. In the extremely rare instance when parts are not available, our policy is that dealers must clearly disclose the situation including printing the open recall information and handing it to the prospective customer. As soon as parts are available, the dealer will then prioritize completing the open recall.”

How Consumers Can Protect Themselves From Recalls

They are few things consumers can do to safeguard themselves from buying a used vehicle that may have recall defects.

  • Look up a vehicle's Identification number (VIN) in the NHTSA’s recall lookup tool. The NHTSA’s system will show any outstanding recalls that have yet to be fixed on the vehicle.
  • Get a vehicle's history report on websites like CarFax to see if the car has been involved in any accidents, if any original parts have been replaced, and if it has been regularly and properly maintained. 
  • Before making a vehicle purchase, ask the salesperson about the history of the car and whether any defects or other safety problems have been made aware to them. 
  • Even if the vehicle list it has been subjected to "rigorous inspection" or as is labeled "safe," get it inspected anyway by a qualified mechanic before buying it. Try to find an auto shop that doesn't have ties to the dealership that the vehicle is being sold from. 

These tips are not 100% effective in every used car buying scenario but in general, they may ease the trepidation one may have in buying a used car. Hopefully, armed with the knowledge of past or present recalls and mechanic history, used car buyers can make an informed decision on what vehicle would serve their needs best while keeping them and others safe. After all, getting involved in a car accident due to a faulty or defective car part because you didn't due your due diligence in researching a used car before purchasing it, is an unfortunate way to harm yourself. 


Car recall lookup tools provided by government websites and agencies such as the NHTSA are one ideal way to make sure that car buyers are truly purchasing safe cars. It is unfortunate that the FTC would approve of the sale of cars with defective parts, thereby making buyers unable to trust the CPO seal that guarantees buyers that they are buying a recall-free vehicle. If you or someone you know has been injured in a car accident caused by a vehicle under recall, call 844.4MI.FIRM and speak to the experienced staff at The Michigan Law Firm, PLLC. We provide free consultations to discuss your legal options.

Dangerous Takata Air Bag Inflators Are Still On The Market

Since early 2015, The Michigan Law Firm, PLLC blog has informed and kept readers updated on the Takata air bag scandal, in which faulty air bag inflators exploded, either randomly or when deployed in car accidents, when the chemical propellant inside degraded. In the latest news, it was discovered that the government overlooked a glaring error while attempting to rid vehicles of defective Takata air bags when they came to an agreement back in January, 2107. Under federal law it is completely legal for junkyards to sell previously or currently recalled and other wrecked vehicle parts to repair shops that later can be placed into other cars. The transaction is easy to do since there isn't a government agency that currently tracks the purchases, nor a state that has laws against the reuse of recalled vehicle parts. This means that faulty Takata air bags have been sold from junkyards and repurposed in cars that people are currently driving.

Faulty Air Bag Accident Lawyer

How To Avoid Buying A Faulty Car

A reused faulty air bag is the reason why Karen Dorado suffered from a punctured trachea, neck injuries, and damaged vocal cords after getting in a minor car crash on March 3, 2017. Dorado’s father bought her a Honda Accord so that she would have reliable transportation to get her back and forth to work and was unaware, at the time, of the car’s history. This history includes a car accident in Phoenix, Arizona in 2015 that declared the vehicle to be totaled and was later salvaged, repaired, and sold in Las Vegas on March 2016. The inflator however, was traced to a 2001 Accord that had been under recall, but had yet to be serviced and must have been stolen or replaced by a junkyard that sold it to the shop that repaired Dorado’s Honda Accord. 

Dorado is only one of almost 200 people injured or killed by the faulty Takata inflators. To avoid getting into car accidents in tricky situations such as Dorado's it is recommended that anyone who is looking to purchase a vehicle first check it's complete purchase and repair history. Auto history trackers like Carfax or AutoCheck are resourceful sites that research the history of used vehicles so that potential buyers will have an idea of any problems they could possibly be inheriting by purchasing a used vehicle.

Takata's Air Bag Buy Back Program

Michigan Car Crash Lawyer

Takata now has a program in place that will buy up any of their air bags to take them out of circulation. In fact, Takata has already purchased around 60,000 of them. However, this still doesn’t prevent future buyers of used or salvaged cars from potential danger even when searching the car's VIN number on websites like the National Highway Transportation Safety Administration (NHTSA), which is only allowed to monitor reported vehicles and not car parts, whether they are reported or not. An NHTSA spokeswoman admitted as much to the L.A. Times stating that, “The federal government has no authority over used car sales and cannot stop air bags from being resold.”

Acting director of the Center for Auto Safety Michael Brooks, said,

“People should be suspicious of cars with salvage titles because there is no way of knowing where the parts came from or the quality of the repair work. Although some are safe, stolen or counterfeit parts can be used.”

Update On The Takata Air Bag Scandal

On January 13, 2017 Federal Detroit prosecutors announced that a settlement was reached with Takata over their defective air bag inflators that would cause debris to explode upon impact. The settlement agreement includes Takata pleading guilty to wire fraud, paying $1 billion in criminal penalties, and the indictment of 3 former Takata executives, Shinichi Tanaka, 59; Hideo Nakajima, 65; and Tsuneo Chikaraishi, 61. Roughly $125 million of the fine is going to go to those who were injured by the air bag - if they haven't received a separate settlement - while $850 million will go to automakers who have incurred debt over replacement costs for the air bags. Takata was also ordered to recall the almost 100 million air bags, in phases, which should be completed by the end of 2019.

Drivers are encouraged to make sure their vehicle has been recently serviced in order to prevent serious injuries and death resulting from the Takata air bag inflators. Future car buyers who may be purchasing a used car or salvaging a current one should be vigilant in making sure that the car parts are purchased from a state approved auto shop. At the very least, any one in the used car buying market should should look up the history of their car's parts.


Although, Takata is now compensating families for their loss, it comes a little too late for those who have lost a loved one due to their negligence. Now, the horror continues through sales of salvaged parts that is completely legal under federal law. If you or someone you know was injured due to faulty air bags or any other recall defect, call The Michigan Law Firm, PLLC. today. We will work hard to earn you any compensation you may be entitled to.

General Motors May Pay $550 Million For Airbag Replacement

Takata Airbag Recall Lawyer

General Motors Company (GM) could be pulling out their checkbook soon, and it’s going to be for a hefty cost. If U.S. auto safety regulators require GM to recall an additional 4.3 million of its vehicles in order to replace Takata-made airbag inflators, the company stands to lose up to $550 million according to Fortune

However, the automaker will not be paying up without a fight. GM reported in its second-quarter earnings report that the Takata airbag inflators in GM vehicles are performing as designed and will not pose an unreasonable risk through 2019, if at all. If regulators decide that GM is responsible for paying for the replacement air bags, the company estimates a cost up to $320 million for the initial 2.5 million vehicles that could be at risk. Additionally, 4.3 million vehicles have been classified as potential danger risks because of Takata defects, which could bump the price tag up to $550 million in total. 

Takata has been in the national spotlight for the past few years with airbag defects causing numerous problems including serious injuries and fatalities. Takata airbags have been deemed dangerous because they can explode violently under extensive heat conditions, sending pieces of metal shrapnel everywhere, including into drivers. These incidents have led to a steady rise in recalls and lawsuits against the company. Fortune reports that while GM doesn’t believe there is a safety issue in any of its vehicles, the company filed a preliminary defect report in May which covered 2.5 million of trucks and sport utility vehicles. 

The ball is now in GM’s court, as they have a chance to prove to the National Highway Transportation Safety Administration (NHTSA) that the inflators do not pose a risk to safety for drivers. If GM can’t convince the NHTSA by September, they will be required to foot the bill. 


If your vehicle has been identified as one of the vehicles that have been recalled due to the Takata airbag defect, or any other vehicle defect, its important that you get your car replaced. Car defects can serve as a serious threat to drivers and passengers, as they may cause the driver to lose control of the car. If you or somebody you know has been injured in an auto accident which was caused by a car defect, call The Michigan Law Firm, PLLC. Our attorneys will work with you to get you the help you deserve. Call us today, at 844.4MI.FIRM for a free consultation. 

Takata Feels Pressure to Replace Defective Air Bags

Takata Air Bag Accident Lawyer

Despite poor financial reports out of Tokyo, Japan this past week, Takata’s urgent need to replace more than 65 million potentially deadly airbags looms overhead. The world’s largest air bag maker, for 17 automakers, announced a net loss of $120.5 million for 2015. The anticipated losses caused the company’s stock to fall by 11%. “If, for some reason, Takata falls out of the equation, the manufacturers of the cars are still on the hook to make sure that the recalls happen,” U.S Transportation Secretary Anthony Foxx said. 

Many car owners who have been contacted about their potentially defective air bags have been told by their dealers that it could be weeks or even several months before their air bags are replaced. The National Highway Traffic Safety Administration (NHTSA) announced that the recall will take place in phases which will be based on the age of the inflators and the scale of exposure to high humidity and fluctuating high temperatures.

NHTSA warned Takata that the company could be fined up to $200 million: $70 million for mishandling the recall of the air-bag inflators and an additional $130 million if it violates the settlement agreement with NHTSA. Smaller air-bag manufacturers are hesitant to increase production without assurance from the auto industry that factories and employees won’t be abandoned once the replacement requirements are met. 

Foxx has stated that the government will continue to apply pressure to Takata, despite their financial situation. “Frankly, if that went into our calculations, I don’t think we would deserve to be called a safety agency. I think progress is being made, but we’ve got to keep our finger on it,” Foxx told The Washington Post

Air Bag Defect Lawyer

Takata’s air bags must be replaced because of the small metal canisters which trigger the airbag inflation when a car collides with something. Takata uses ammonium nitrate in those inflators, unlike most air-bag makers. Independent studies revealed that when Takata inflators are worn down by age and hot climates, they are prone to explode, sending shards of canister metal towards the driver and passengers. 

As a result of the defect, 11 Americans have died and over 100 have been injured by the inflator explosions. With little to no choice, Takata announced that they would be phasing out the use of ammonium nitrate in their airbags by 2018. 

The Michigan Law Firm blog followed up on this Takata recall, as we previously wrote a blog post on the topic when the recall was first announced. 


The last thing drivers expect to happen while they are driving is for their air bags to randomly deploy. Not only can the impact of the air bag injure the driver and passengers, it can cause the driver to lose control of the vehicle. If you have been involved in an auto accident caused by defective air bags or other car equipment, call The Michigan Law Firm, PLLC. Our attorneys are educated on all of the different auto recalls and will work with you to get the necessary help. Call us today, at 844.4MI.FIRM for a free consultation.

Takata's Dangerous Air Bag Recall

Car Accident Attorneys

If you own a car from model years 2002-2008 made by BMW, Chrysler, Ford, Honda, Mazda, Nissan, Toyota, Mitsubishi, Acura, Dodge, General Motors, Infiniti, Lexus, or Subaru, you may be driving with a defective airbag. Almost 17 million cars that used Japanese company Takata’s driver’s side and passenger’s side frontal air bags, have been recalled. As Takata supplies one-fifth of all motor vehicle air bags in the world, there may be millions of more cars on the roads that need to be recalled.  
 
The problem with the air bags is that over time and due to high humidity, the chemical canister, which erupts and propels thereby inflating the air bag, has been deteriorating and exploding causing the air bag to inflate and shards of the canister to be dispersed into the car. To date, 6 people have been killed and over 100 drivers have been injured because of the faulty airbags in their vehicles.

The National Highway Traffic Safety Association (NHTSA) has been investigating Takata after learning that Takata had known about the defects since 2004 and found that the company had conducted secret tests during non-work hours at their American headquarters in Auburn Hills, Michigan. Allegedly, Takata ordered employees to delete data which identified these defects and kept all testing a secret instead of reporting the dangers to federal safety regulators. Thus, starting February 20th, 2015, the NHTSA has been fining Takata $14,000 a day for not cooperating with their investigation.
 
Some car owners have already received recall notices form the manufacturer informing them what to do if their car fits the criteria of the recall. For those car consumers who worry that their car’s make and model may match the above description, finding out if there is a recall notice on their car is easy. The NHTSA website allows car owners to look their car by it’s VIN number to see if there is a recall issued.  If your car has a recall notice issued, then the manufacturer will replace the airbags for you.  
 
If you live in a high humidity climate, it is very important that you look up your car for defective air bags. If your air bags have been recalled but haven’t been replaced yet, you can take preventative measures such as limiting your driving, using public transportation, carpooling in a non-recalled car, or renting a car, to avoid being injured by Takata’s defective air bags. Even if the air bag doesn’t spontaneously erupt on it’s own, it can injure you if it inflates as a result of a car accident.
 
If you have been injured in a car accident, call The Michigan Law Firm, PLLC. We aim to help victims of motor vehicle accidents deal with the difficulties of medical bills, insurance companies, and police investigations. The Michigan Law Firm’s experienced team makes sure you receive the benefits you are entitled to and helps you recover with dignity. Call us today at 844.4MI.FIRM or click here for a free consult.

Sources:

Safer Car

NY Times