I came accross a CarMax, Inc., February 21, 2006, press release regarding a Fortune Magazine most-admired survey. My story of uncorrected and compounding fraud is a cautionary tale for American buyers of used vehicles. Here is the entire second paragraph of CarMax's press release:
"CarMax is honored to be recognized as a 'most admired' company in automotive retailing, services," said Austin Ligon, president and chief executive officer of CarMax. "We believe that this recognition is an acknowledgement of how we're revolutionizing our industry. We're giving customers what they want in a car buying experience by creating a company culture that is focused on being ethical, trustworthy, and respectful of our customers."
The balance of this message is a tale that began on January 16, 2006, and continues today. Yes, CarMax CEO Austin Ligon's self-congratulatory press relase occurred right in the middle of my story.
The largest seller of used automobiles in the U.S., CarMax, Inc., a generally-respected, profitable, and publicly-traded company committed sales and warranty fraud. The company pledges "exceptional customer service" and asked for my "frank and honest assessment" on a post-purchase survey to which CarMax's CEO, W. Austin Ligon, offered his name.
I wrote to the CEO of the company Febraury 3, and have had numerous telephone discussions with local (Hillside, Illinois) and headquarters (Richmond, Virgina) CarMax employees, but I have yet to receive a written response from the company. I have kept Mr. Ligon apprised of the deteriorating situation by e-mailing him on Febraury 4 and 25, March 1, 2, and 5, always without reply. I know that my February 3, letter reached CarMax headquarters, because a Hillside employee told me by telephone on February 11 that he had a copy of it in front of him.
Bottom line: CarMax sold me a nice car, but not the car it represented in writing the car to be. I requested corrective action, and CarMax's treatment of me and my family has gone from shabby to abominable.
In January 2006, CarMax sold me a slightly used car (2005 MINI Cooper S, manufactured February 2005, and with 12,020 miles on it). CarMax represented in writing more than once: "Leather Seats." This representation was made to me in writing as a " fact" on January 16, when I paid $450 to have the car shipped from Maryland for the purpose of purchasing it at CarMax in Hillside, Illinois. This was also represented in writing on the window sticker in all capital letters "LEATHER SEATS" under the heading "Equipment" on January 28, when the car arrived in Hillside and I completed the purchase.
The seats are, in fact, not leather as I discovered a few days after purchasing the car, and confirmed with a new MINI dealership (Bill Jacobs BMW/MINI, Naperville, Illinois) based on my vehicle identification number. The upholstery is a cheaper man-made substance, Leatherette, which, by definition, intends to imitate leather. Leather was a $1,300 upgrade option on that car when new less than a year before I purchased it. A respected national market value estimator (edmunds.com) estimates that leather seats add $1,115 to the market value of my car (purchasing it from an automobile dealer) at this point in time and in my market area.
I contacted a CarMax manager (Suzanne at Hillside) first on February 2, informing her of the CarMax error and seeking adjustment. I wrote to the CarMax CEO the next day, after being told flatlyby Suzanne: "We don't make adjustments." CarMax employees have lied to me repeatedly by phone since then, and most recently in person February 25.
On February 3, CarMax headquarters employee (Tory) told me that the seats are not leather, but "pretty much the same as leather"..."just as good as leather." He has not taken me up on my standing offer to swap every leather watchband, belt, shoe, and jacket he owns for vinyl replacements to be provided by me. Tory referred me to a Hillside employee named Noel, who never returned my two voice messages (February 3 and 4) indicating that Tory had referred me and I wanted a return call. Tory offered no corrective action. Noel never bothered to respond.
On February 6, a Hillside manager (Tim West) telephoned me and said that leather seats (as an upgrade option) depreciate 100% the moment a new MINI rolls out of the new car dealer's lot, so no harm done. This assertion is supported by no independent car pricing guide, and is just plain nonsense. We're not talking about new-car smell here, but rather a $1,300 option on a vehicle that left the factory less than a year before I purchased it. Tim offered no corrective action, and refused to replace the seats, pay me for the difference, or return my traded-in Toyota and rescind the entire transaction.
On February 7, the same Suzanne mentioned above (the "we don't make adjustments" Suzanne) telephoned me to say that "corporate" had told Hillside to "work it out" and that I would be contacted soon for that purpose.
On February 11, Hillside employee Gary Allen, who said he reports to Tim West, telephoned to tell me that CarMax would give me a check for $1,115, the amount I requested on February 3, but that he did not yet have the check. He called February 16 to say still no check, and that I would be asked to sign what he then called innocuously "a disclosure statement."
When Gary Allen called on February 25 to say that the check was available for pickup, he mentioned a "release." When I went with my family (wife and minor children) to Hillside to pick up the check, I was horrified by the "FULL AND FINAL RELEASE" presented for signature. It would have nullified the seller's (CarMax's) powertrain and major systems warranty then still in effect. The document went on to dispute all claims, deny all liability, and indicate that I was being paid for silence. What was there to dispute or deny? The truth is the truth.
The release might have been an appropriate document for a $4 million settlement following death in a flaming crash, but totally inappropriate for my situation. I wasn't being paid anything to give up the warranty or for my silence, and no CarMax employee had ever suggested before I was told I could collect the $1,115 check that this was the deal. After promising resolution, CarMax was actually trying to defraud me one more time.
To make matters worse, Gary Allen brought in Hillside General Manager (Rebecca), who behaved beastly. Rebecca completely misrepresented the "FULL AND FINAL RELEASE" as dealng solely with upholstery, although she was unable to find either the word "upholstery" or the word "seats" in the document for me. She characterized my lucid and articulate recitation of the key provisions of CarMax's own document (any and all claims, past, present, and future) as "a feeling." She intended to insult me in front of my family.
Rebecca said that the release would not affect the warranty, but she was similarly unable to point to any exception or exclusion to the "full and final" wording. This is simple warranty fraud. Her subordinate's (Gary Allen's) body language and facial expression demonstrated that he was uncomfortable with Rebecca's misrepresentations, and with the strange turn of events. CarMax kept the check for $1,115.
Anyway, my standing request is that, if CarMax wants to claim in writing that it has paid for my silence, then it is going to have to pay me for that. Alternatively, the release document was so obnoxious, given CarMax's blatant and numerous representations of "Leather Seats," that I have asked CarMax to make a written offer to repurchase the vehicle, at a price sufficient to restore its standing to the level of its claim of "exceptional customer service."
CarMax managers routinely say "can't," when the truth is that they "can, but won't."
Used car salesmen who go big-time-corporate are still used car salesmen. As the saying goes in Spanish: Aunque la mona se vista de ceda, mona se queda.
Shame can be a great motivator. Despite being a distinguished CEO planning for succession and retirement, Austin Ligon has never learned the Chinese proverb: "Talk does not cook rice." Ethics, trustworthiness, and respect happen in real life and between people, not in a press release.
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