Company: TRUE
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001327318-25-000036
Chunk: 107

Company: TrueCar, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part II, Item 1A
Chunk 107
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 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 

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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 on our platform and a consumer on behalf of a putative class of consumers, respectively. In 2017, we were again named as a defendant in a putative class action brought by a consumer.  Each of these matters has been settled or dismissed and is currently resolved.

If regulators or other third parties take the position in the future that our products or services violate applicable brokering, “bird-dog” or advertising laws or regulations, responding to those allegations could be costly, require us to pay significant sums in settlements, require us to pay civil and criminal penalties, including fines, interfere with our ability to continue providing our products and services in certain jurisdictions or require us to make adjustments to our products and services or the manner in which we derive revenue from our participating dealers, any or all of which could result in substantial adverse publicity, loss of TrueCar Certified Dealers from our network, decreased revenues, increased expenses and decreased profitability.

Insurance Regulatory Laws

The advertising and sale of automobile insurance is highly regulated by the jurisdictions in which we do business. Although we do not sell insurance, certain of our partners sell insurance to the public in general and may sell insurance to our users in particular. Further, we enter into arrangements with certain such partners