Commerce Commission warns car dealer over potentially misleading advertising
Wednesday, 30 January 2019
A car dealer has been warned for for likely breaking the law when selling two vehicles.
The Commerce Commission issues the warning to Mosgiel-based Taieri Motor Court (TMC).
TMC trades from branches in Mosgiel and Mt Roskill, Auckland, and via its website and Facebook page.
The Commerce Commission said the dealer had made misleading representations about the distance a vehicle offered for sale had travelled, and about selling vehicles on a private basis, and failed to comply with the Consumer Information Standards regulations.
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The commission received a complaint about a Facebook post from TMC about a 2001 Subaru Impreza with an odometer reading of 160,000km. The Subaru's odometer reading was actually 166,000km.
TMC told the commission the vehicle was sold privately and without TMC displaying or providing to the purchaser a Consumer Information Notice (CIN).
'We have warned TMC that, in our view, its odometer representation and its failure to display a CIN likely breached the FTA. Traders must display a CIN in the vehicle and in the online advertisement if selling online, and they must not misrepresent the history of a vehicle, including information such as the distance it has travelled,' said commissioner Anna Rawlings.
The commission subsequently identified a Mercedes on TMC's Facebook page, being advertised as a private sale. The commission established that at the time of advertisement, both the Mercedes and the Subaru were registered to TMC.
'Different rights and obligations apply when consumers buy from a person in trade as opposed to a private seller, so telling consumers that they are buying privately has the potential to mislead them about their rights if something goes wrong,' Rawlings said.
The commission had also written to TMC over its response that the Subaru was offered for sale on an 'as is, where is' basis, 'because it was not yet ready for sale'. The commission said this was a possible breach of the law and TMC was provided with advice to assist its future compliance.
'Using a term like 'as is where is' can suggest that the Consumer Guarantees Act (CGA) does not apply to the vehicle and the consumer has no recourse against the seller if those guarantees are breached. However, this is not the case. Traders are prohibited from contracting out of the CGA when they sell to individuals. Recent court decisions have confirmed this,' Rawlings said.
Car dealers are a current area of focus for the Commerce Commission.
In July last year, a trader was fined $75,000 for misrepresenting consumers' rights when selling used vehicles online, and for failing to display essential vehicle information.
On Monday, the commission said it had laid 10 charges under the Fair Trading Act against vehicle retailer 2 Cheap Cars for advertising claims and its use of 'warranty waiver' documents.