False information costs Christchurch car company
13 May 2008
A Christchurch motor vehicle dealer has pleaded guilty to providing a buyer with incorrect information, in falsely describing it as not damaged when it was imported.
Inch McLellan Motors Limited entered the guilty plea in the Christchurch District Court yesterday, in relation to contraventions of section 28 of the Fair Trading Act 1986 (the Act), for breaching the Consumer Information Standard (Used Motor Vehicles) Regulations 2002 and section 13(a) of the Act.
The company had stated on the compulsory information (SIN) card displayed in the car window that the car was not imported as a damaged vehicle. The buyer had also asked one of the owners of the car yard for verbal reassurance that the car had not been involved in an accident prior to being imported, and was assured it had not been.
The woman purchased the car in 2006 for $9845. However almost a year later when she tried to use it as a trade-in at another car yard she discovered the car was registered as "imported as damaged".
Inch McLellan Motors Ltd said it had not carried out a Motorweb Vehicle Information Report or a Land Transport Motocheck Query. These simple checks would have alerted it to the damage status.
The court ordered a fine of $5,000. This is in addition to the buyer having already received a refund of the full cost of the car, ordered by the Motor Vehicle Disputes Tribunal.
Commerce Commission Chair Paula Rebstock said "The case highlights the importance of motor vehicle traders ensuring the information described in the SIN card is true. There are simple steps to be taken to ensure the information they provide potential buyers is accurate. Buyers are entitled by law to accurate information."
"Previous accident damage is an important consideration for a potential car buyer, as it will affect the re-sale value of the car. The provisions of the Fair Trading Act are there to ensure consumers can rely on the information they are given," said Ms Rebstock.
Supplier Information Notice
Motor vehicle traders (not private sellers) must display a window card (SIN card) providing such information as the vehicle's age, usage, make and model and whether another person has a security interest in the vehicle. It must also state if the vehicle has been imported as damaged.
NB: As of 1 July 2008 SIN will be known as CIN (Consumer Information Notice)
Fair Trading Act
Court penalties for breaching the Fair Trading Act can include fines of up to $200,000 for a company and $60,000 for an individual. Only the courts can decide if a representation has breached the Act.