Carfax accuracy questioned in lawsuit playing out in Berkeley County

Car buyer suing Carfax, Inc. in Berkeley County court claiming inaccuracies in report.

While an eventual final ruling may not set any major legal precedent, the case involves a popular company used by millions who spend thousands on an investment they depend on daily.

Car buyers are often told to ‘check the Carfax’. The reports, obtained via phone or website by using a vehicle’s VIN-number, are vital in determining the history of a car or truck and the information provided is expected to be, somewhat, up-to-date. But a lawsuit filed by a Berkeley County resident alleges that was not the case regarding the sale of a truck back in November 2016.

“I haven’t filed a similar action before but it seems to be an ongoing problem in the market place that consumers are facing,” said Victoria Smith, from Payne Law Firm on Daniel Island who is the attorney for the plaintiff in the case.

The lawsuit was filed in July of 2019. The complaint states that Carfax, Inc., headquartered in Pennsylvania, did not update a report provided to the buyer of a previously owned 2015 GMC truck.

“They purchase a vehicle—three, four, five, six-years later get ready to sell the vehicle and all the sudden some information is popping up through Carfax reports that are dissuading prospective buyers from purchasing the vehicle,” Smith said.

At the time of purchase in 2016, the report was clean of any prior incidents. “I believe it was showing damage from 2015 and they didn’t actually begin reporting that 2015 damage until the year 2018,” Smith said.

The Berkeley Independent contacted Carfax regarding the lawsuit but they have not yet reached out to comment. The company’s website does address issues with missing history on their reports, saying, “CARFAX receives accident information from thousands of sources, but not every accident or damage event is reported and not all reported are provided to CARFAX,” and “CARFAX always recommends the CARFAX Report is used along with a pre-purchase vehicle inspection and thorough test drive to check for prior repairs, hidden damage, and anything that might not have been reported to CARFAX.”

It’s alleged that the company was even made aware of the incident involving the truck but until 2018 refused to update the report. On Dec. 10, in Berkeley County, the company made an effort to have the case dismissed and provided details of the 2015 incident involving the truck with insurance information and damage photos to the court. Details Smith said they refused to provide prior to litigation. The judge ruled the case can move forward.

“We are going to amend the proceedings to now claim negligence and that Carfax waited for three years to report that damage,” Smith said. “We still don’t have specifics as far as, when Carfax actually knew of that information and when they should have started making that visible on their report on the same vehicle.”

As the case moves forward Smith said a discovery process, investigating Carfax’s practices will begin. It will determine how the company gathers information before releasing it and how soon the details are given to the public.

“It’s almost a double-edged sword,” Smith said. “My client paid more for a vehicle because he believed it didn’t sustain any damage prior to buying it, now he goes to sell it and he’s able to sell it for less because now their reporting that their previous report was inaccurate.”