Online car dealer Vroom faces dozens of state violations as customer complaints mount
HOUSTON (CBSDFW.COM) - Hundreds of car buyers have filed complaints about delays in getting titles and registrations after purchasing a vehicle from the online used car dealer Vroom.
More than 4,700 formal complaints have been filed by Vroom customers with the Better Business Bureau and the Texas Department of Motor Vehicles has issued the Houston-based company more than 80 violations since 2019 – leading to 59 cease and desist orders.
Without having the title and registration, Vroom customers told the CBS 11 I-Team they are worried about being ticketed by law enforcement or having their vehicle towed.
"I'm afraid if my child gets pulled over by a police officer that they could find the car to be stolen," said David Gerda of Keller, Texas, six months after he purchased a car from Vroom for his teenage son. "We can show we paid for it, but we can't show that we own it because we don't have a title."
Gerda has since received notification his vehicle has been registered with the Texas DMV but said he still does not have the vehicle's title.
Under Texas law, a car dealer has 30 days from the sale of a vehicle to file the title and registration paperwork and 45 days if the vehicle is financed.
A Vroom spokesperson told the I-Team, "We are aware some customers are experiencing delays in receiving their titles and registrations. We are actively working with them to resolve their issues as quickly as possible so they can fully enjoy the vehicle they purchased from us."
Vroom touts itself as a painless way to buy a vehicle online and has seen sales skyrocket in the past year with an 167% increase in revenue last year, according to the company's website. Vroom reported more than $2.4 billion in ecommerce revenue in fiscal year 2021.
Vroom declined to answer the I-Team questions about what has caused the delays in customers receiving their titles but, in its latest required annual report filed with the U.S. Securities and Exchange Commission, Vroom noted it has "encountered operational challenges" in keeping up with it rapid growth. According to the company's report, during the last six months of 2021, Vroom experienced an increase in customer complaints which lead to an increase in state regulatory inquiries.
Along with Texas, Vroom holds a dealership license in Arizona and Florida.
The Florida Department of Highway Safety and Motor Vehicles recently issued Vroom a $47,000 fine for 47 counts of not transferring a vehicle title in accordance with Florida law.
Meanwhile, Arizona state officials said they are currently looking into multiple complaints from Vroom customers.
Despite more than 80 violations in Texas the past three years, the Texas DMV has not taken action on Vroom's dealership license and has levied fines to the company totaling less than $35,000.
The Better Business Bureau of Houston President, Don Parsons, said he believes state regulators have not done nearly enough.
"I think maybe it's about time they got in there and used a bigger stick, because the little one isn't working," he said.
A Texas DMV spokesperson told the I-Team, "TxDMV shares the frustration of Texas consumers who spend a significant amount of money to purchase a vehicle but encounter problems when dealers do not follow the law to transfer the vehicle title. We investigate every complaint and take action to assist with resolution of issues on a daily basis."
Parsons said his office receives multiple complaints about Vroom daily.
"There is no other company in my database that racks up as many complaints as Vroom," he said.
Vroom has an "F" rating with Better Business Bureau and was stripped of its accreditation.
Parsons said his organization has done everything it can to warn consumers.