Shares of Carvana (CVNA) - Get Carvana Co. Class A Report were falling Friday morning as a media report said the online used car sales platform faced fines and government investigations regarding consumer complaints about its practices.
Consumers have filed dozens of complaints with state regulators against the company and hundreds of complaints with the Better Business Bureau about issues that include incorrect paperwork, delays getting titles and registrations and other issues, The Wall Street Journal reported Friday.
“Carvana has pioneered online car buying by continuously delivering exceptional experiences, and we have bought and sold well over a million cars with customers,” a company spokesperson told the Journal.
The spokesperson also noted that the Tempe, Ariz., company has strong customer-satisfaction ratings.
Carvana shares at last check were down 2.2% to $295.23. The stock in mid-August touched a 52-week high near $377.
The Better Business Bureau collected 899 complaints from Carvana shoppers in 2021 through September, the Journal reported. That's more than twice the 411 complaints recorded for rival CarMax. (KMX) - Get CarMax, Inc. Report
The Journal also notes that CarMax sold about triple the number of cars in its most recent fiscal year as Carvana did in 2020.
Shares of CarMax, based in Richmond, Va., were recently trading 0.9% higher at $143.11.
In August, Carvana received a six-month suspension from selling cars at its Raleigh, N.C., dealership after violating the state's dealer-licensing laws.
Also in August Carvana ended up paying $850,000 to settle a civil lawsuit with four counties in California for selling and transporting cars without licenses to do so.
Carvana is scheduled to report third-quarter results on Nov. 4.