TrueCar announced that its service in Colorado state has been suspended

Article by Christian A., on January 12, 2012

TrueCar.com has informed Colorado dealers that its service in the state has been suspended. In an e-mail to dealers, a Colorado TrueCar account manager said that the suspension is voluntary since the online auto shopping site manages state regulators to "conform to the rules of the road in your state." The Colorado auto regulators cautioned last December that participating TrueCar dealers could be in violation of some state laws. Thuy Adomitis, a TrueCar account manager, wrote that it will be able to resolve any regulatory issues by Jan. 17.

Adomitis said that the service will be reactivated, including having the account automatically reactivated. Last Dec. 15, the Colorado Department of Revenue said TrueCar's materials and Web site violate several state regulations, including advertising rules. The TrueCar business model makes it possible for dealers to breach bait-and-switch laws if the preferred vehicle isn’t available and the dealer tries to sell a different vehicle to the customer.

The regulatory agency said that TrueCar didn’t have all the required licenses. There are concerns about the TrueCar model’s legality that had been issued from regulators and dealer associations in several other states, such as Wisconsin, Kansas and Virginia. In a statement, TrueCar said that as of late last month, regulators from six states have contacted it.

These include Colorado, Louisiana, Nebraska, Kansas, Virginia and Wisconsin. Notably, Colorado is the only state where TrueCar’s service is suspended. Since then, dealer associations in Maryland and Indiana have sent bulletins to members. Meetings have been set next week by the state regulatory agencies in Virginia and Oklahoma that supervise dealerships.

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