The Holman Automotive Group and FedEx are facing a lawsuit accusing them of colluding to sell diesel fleet delivery vehicles with tampered odometers at inflated prices. The plaintiffs, consisting of five consumers who purchased these vehicles and are seeking class-action status, argue that this scheme has unfairly impacted small-business owners who paid excessive amounts for vehicles that were beyond their expected lifespan. The lawsuit was filed on June 13 in the U.S. District Court in New Jersey.
In usual circumstances, courier services like FedEx and United Parcel Service retire older vehicles. According to the lawsuit, Holman assisted FedEx in identifying and disposing of diesel fleet vehicles that had reached the end of their useful lives, typically around 350,000 miles. However, the lawsuit alleges that starting around 2011, FedEx decided to pursue another revenue source by reselling these fleet vehicles instead of scrapping them. Holman is accused of actively engaging in odometer fraud in partnership with FedEx as part of this reselling venture.
A representative from Holman stated, “It is Holman policy not to comment on pending litigation. Holman complies with its legal obligations and looks forward to defending the case in court.” Holman, ranked No. 26 on Automotive News’ 2023 list of top dealership groups in the U.S., sold 23,902 new vehicles and 23,778 used vehicles last year.
The National Highway Traffic Safety Administration (NHTSA) estimates that over 450,000 vehicles are sold annually in the United States with falsified odometer readings. This form of fraud costs American car buyers more than $1 billion per year, according to the federal agency.
The plaintiffs are seeking statutory damages of at least $10,000 per violation under the federal Odometer Act.
A representative from FedEx told Automotive News, “We are aware of the allegations made in the complaint and will vigorously defend the lawsuit.”
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
