Regulatory history
In August 2021, Carvana's Raleigh vending machine was issued a temporary ban by regulators in North Carolina due to its failure to properly conduct inspections and provide vehicle titles to customers as required by state law. Carvana continued business in Raleigh from other sites in the area and the vending machine was allowed to resume business in January 2022.[25]
For two weeks from May 10, 2022 through May 25, 2022, Illinois suspended Carvana's business license due to customer complaints, effectively banning the company from conducting business in the state. The Office of the Secretary of State of Illinois stated that the company had failed to provide titles to buyers for the vehicles they had purchased within 20 days, as required by Illinois law, and in some cases had illegally issued temporary registrations from other states to customers in Illinois.[26] The state lifted the suspension on May 26, 2022, after imposing strict guidelines on the company's operations. On July 18, 2022, the Secretary of State's office announced that Carvana's suspension was reimposed after finding that company continued to engage in illegal conduct.[27][28] Paul Breaux, Vice President for Carvana, was charged with multiple misdemeanor and petty offenses due to the Illinois issues.[29] On July 29, 2022, Carvana won a temporary injunction against Illinois to resume business in the state and the Illinois Secretary of State was banned from 'suspending or revoking' the company’s certificates of authority and dealer plates.[30]
Similar issues have been faced in other states, including Pennsylvania, where a class action lawsuit has been filed alleging that the company violated the state's Unfair and Deceptive Trade Practices Act by failing to properly transfer ownership to buyers, a matter in which Carvana denies any liability.[25][31]
On October 7, 2022,[32] the Michigan Secretary of State suspended the license for the Carvana dealership in Novi for "immediate harm to the public" due to violations of the Michigan Vehicle Code.[33] Before the October 2022 suspension, the state had conducted an investigation in February 2021 that led to Carvana agreeing to be placed under probation in May 2021 and admitting violations. Additional violations occurred during the probation period, and Carvana agreed to a six-month extension of the probation period in February 2022.[33][34] Despite the suspension, the Novi location continued to operate the following week.[32]
