Feds Investigating General Motors Over 'Certified' Used Cars

General Motors disclosed in its quarterly Securities and Exchange Commission filing Thursday that the Federal Trade Commission is investigating the automaker for selling used cars under recall, the Detroit News is reporting.

According to the automaker, the FTC notified GM that it was investigating “certified pre-owned vehicle advertising where dealers had certified vehicles allegedly needing recall repairs.”

The filing acknowledges the investigation is connected with the 2014 recall of 2.59 million cars with faulty ignition switches that could turn the car off while driving, disabling its airbags. So far, 124 deaths have been linked to the defect.

The investigation is significant partially because a bill winding through Congress would significantly change penalties associated with defective cars. This week, a Senate committee shot down a proposal that would have forced used car dealers to complete recall repairs on vehicles for sale. A similar measure compelling rental car companies to fix defective cars in their fleets survived.

GM is being investigated by the U.S. Department of Justice as well as attorneys general in every state for issues related to the faulty ignition switches. GM could be fined and face criminal penalties from the Justice Department.

“We continue to investigate these matters and believe we are cooperating fully with all requests for information in ongoing investigations. Such investigations could in the future result in the imposition of material damages, fines, civil consent orders, civil and criminal penalties or other remedies,” GM wrote in their filing.