Media Releases

Commission uses new enforcement tools

6 March 2015

The Commerce Commission has used the new enforcement tools granted as part of the Consumer Law Reform last year to issue infringement notices for the first time to motor vehicle dealers in Auckland and Christchurch.

Infringement notices carry a fine of $1,000 each and can be issued to businesses by the Commission for breaches of the Fair Trading Act relating to the failing to disclose certain information to consumers, such as:

  • not disclosing, when selling on the internet, that they are a trader (rather than a private seller), for example, on auction sites like Trade Me
  • failing to clearly display a Consumer Information Notice, or CIN, on used motor vehicles in the car yard and in adverts for Trade Me auctions, where the car can be purchased online
  • not providing the required information to customers about laybys, uninvited direct sales and extended warranties.

“Being able to issue infringement notices for relatively minor and straight-forward breaches of the Act is an efficient and effective way of getting businesses to immediately change their behaviour and comply with the law. They are an important part of our enforcement toolkit and we expect to be using them more in the future,” said Commerce Commission Chairman Dr Mark Berry.

“We have been given the mandate to issue these notices without the need to go through all the usual steps of our enforcement process, including preparing for possible court action. This means we are able to achieve an appropriate result, like deterring traders from bad behaviour, in a cost-effective and timely way.”

To date, the Commission has issued eight infringement notices to three separate motor vehicle dealers in Auckland and Christchurch for failing to display CINs and not disclosing their trader status when selling online.

CINs document important information about a used car including year, make and model, price, odometer reading and if the car was imported into New Zealand as damaged.

“The requirement to provide a CIN for used cars is crucial for consumers. Without it, they cannot make informed choices about purchasing the car or not. If consumers buy a car from a trader they have legal protections for a reasonable time if there are faults with the vehicle,” said Dr Berry.

The Commission became aware of the missing CINs and non-disclosure of trader status at these motor vehicle dealers through complaints from members of the public.

Information for traders on complying with consumer information standards is available.

Background

Consumer information standards require the disclosure, to a specified standard, of certain information about goods and services. The standards are enforced by the Commission under section 28 of the Fair Trading Act.
 
There are currently five Consumer information standards.

All businesses must ensure that they are aware of the requirements of any Consumer information standards that are relevant to them. It is a breach of the Fair Trading Act to fail to comply with the requirements.
 
Consumer information standards are available from selected bookshops or on the New Zealand Legislation website. Any relevant standards referred to in the regulations can be purchased from Standards New Zealand by calling 0800 STANDARDS (0800 782 632) or via its website.