Texas Sues Online Car Dealer Vroom For “Deceptive Trade Practices” 

Vroom is supposed to be a painless way to purchase a used car online, but it’s far from that. Thousands of Vroom customers have filed complaints in Texas about long delays in receiving the title, registration, and plates after purchase, prompting Texas Attorney General Ken Paxton to file a “deceptive trade practices lawsuit” against the company on Wednesday. 

Vroom is an online used vehicle dealer operating under Texas Direct Auto. The lawsuit alleges that Vroom failed to disclose significant delays in transferring titles and vehicle registrations to customers within state law (a 30-day window). 

Paxton also said Vroom misrepresented and failed to reveal vehicle history, condition, and financing terms to customers, which are violations of the Texas Deceptive Trade Practices Consumer Protection Act.

More than 5,000 consumer complaints have been filed with the Better Business Bureau and the Office of the Attorney General against Vroom and Texas Direct Auto over the last three years. 

The company also has a dealer license in Florida and has been hit with complaints. It conducts business around the country, so the title, registration, and plates problems are widespread issues for customers across the country. 

Vroom’s latest SEC filing sheds light on what could be the issue. The company failed to manage growth adequately and didn’t have the backend systems to keep up with titles and vehicle registrations. 

From time to time, we have been subject to audits, requests for information, investigations and other inquiries from our regulators related to customer complaints. As we have encountered operational challenges in keeping up with our rapid growth, during the past six months there has been an increase in customer complaints, leading to an increase in such regulatory inquiries. We endeavor to promptly respond to any such inquiries and cooperate with our regulators.

On June 8, 2020, Vroom went public at $22 per share. Prices jumped to $73 by late summer of 2020 and have since collapsed 97% to a record low of $1.70 on Wednesday. Goldman Sachs & Co. LLC, BofA Securities, Allen & Company LLC, and Wells Fargo Securities were the lead book-running managers and representatives of the underwriters on the offering. 

Here are some of the countless horror stories Vroom customers have shared with the Better Business Bureau. 

This Vroom customer has waited 10 months and still has no title, registration, or plates.

Save yourself the pain and avoid purchasing a car from Vroom.