Company: TRUE
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001327318-25-000065
Chunk: 42

Company: TrueCar, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 4
Chunk 42
---
 of these issues. For example, in the beginning of 2012, following implementation of our first nationwide television advertising campaign, regulatory inquiries into the compliance of our products and services with brokering, “bird-dog” and advertising laws intensified to a degree we had not previously experienced. Responding to and resolving these inquiries, as well as our efforts to ameliorate the related adverse publicity and loss of TrueCar Certified Dealers from our network, resulted in decreased revenues and increased expenses and, accordingly, increased our losses during much of 2012.

Further, as we expand our business model to offer new products or services, we may become subject to motor vehicle sales, advertising and brokering laws that have not historically applied to our business and with which we are not operationally experienced. For example, after the wind down of our commercial relationship with Accu-Trade as discussed in the risk factor entitled “If we are not successful in rolling out new offerings, including our TrueCar+ offering, providing a compelling value proposition to consumers and dealers using those offerings, integrating our current and future offerings into such experiences or appropriately monetizing them, our business and prospects would be adversely affected,” we began providing certain services to our dealers and users with the support of our affiliate, TCWS, instead of Accu-Trade. This has resulted in TCWS being subject to laws and regulatory schemes with which we have no previous operational experience. It may also result in TrueCar, Inc. being subject to laws and regulatory schemes that were not previously applicable to our business.

Between 2015 and 2017, which was a significant period of expansion for our business, we received notices or were otherwise subject to investigations from regulators in Texas, Mississippi, California and Ohio. These notices and investigations were based upon various assertions or allegations related to certain of our advertising practices and other aspects of our business model. In each case, we responded to the notices and/or investigations and no further action has been taken. As a result, we consider the issues raised to be informally resolved, but we cannot assure you that these matters or similar matters will not reemerge in the future. 

We have also been subject to actions brought by dealers, consumers and third-party industry associations related to our advertising and business practices, including allegations that we have operated as an unlicensed automobile dealer and 

60

autobroker. For example, in 2015, we were named as a defendant in three separate lawsuits in California brought by the CNCDA, a group of dealers participating