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Dealer fined $75k for listings

A motor-vehicle trader has been fined $75,000 after misrepresenting buyers’ rights when selling used vehicles online and for failing to display vehicle information.
Posted on 19 July, 2018
Dealer fined $75k for listings

Vehicle Logistics Limited (VLL) was sentenced on July 18 in Papakura District Court on eight charges brought by the Commerce Commission under the Fair Trading Act (FTA).

VLL, which trades as SsangYong Takanini, sold trade-ins via $1 reserve auctions on Trade Me Motors. Five of the charges arose from representations made in listings that used vehicles were offered for sale on an “as is, where is basis” and or that “no guarantee or warranty” applied.

“This case demonstrates traders must not attempt to mislead consumers about their rights and there can be serious consequences if they do,” says Stuart Wallace, the commission’s consumer manager, pictured above.

“By stating vehicles were, for example ‘as is, where is’, this trader was attempting to avoid obligations under the Consumer Guarantees Act [CGA].

“Statements were misleading because they were an attempt to contract out of the CGA. Traders cannot evade their responsibilities to provide guarantees and remedies under the act by using phrases such as ‘end-of-life vehicle’ or ‘suitable for parts only, but runs well’. 

“When consumers buy vehicles from traders, rather than private sellers, the purchase will always be covered by legal statutory guarantees, including the vehicle is of acceptable quality and complies with its description. Any attempt by traders to mislead consumers about their rights is likely to breach the FTA.”

In sentencing, Judge Gerard Winter said: “the company was lazy if not willfully blind to its obligations”. He added there was “no difference” between physical and online sales.

“Any attempt to contract out is important, particularly in the case of the internet, which could lead to a breach of trust for consumers who use e-commerce in their daily lives.”

There were also three charges were for failing to display or provide access to consumer information notices (CINs). Traders are required to include a CIN in online advertising for a vehicle when it’s possible for a consumer to buy it via the internet.

The charges covered 382 vehicle listings between June 2015 and January 2017 offered for sale via two Trade Me memberships operated by VLL sales consultants.

Trade Me repeatedly advised VLL of the errors, but VLL took no steps to remedy them.

VLL changed the way it listed used motor vehicles on the website in January 2017 after being informed of the commission’s investigation.

Wallace says: “The commission is concerned about conduct in the motor-vehicle trade and the number of complaints we get. Already this year we have warned Auckland trader Motor Me and its owner over representations made about the quality of vehicles it sold, and have other open investigations. Traders should take particular note of the fine handed down to VLL and consider their conduct.”