Company cops $67,500 fine over used-car sales
An Auckland automotive business has been fined $67,500 for misrepresenting consumers’ rights under the Consumer Guarantees Act 1993 (CGA) and for failing to provide Consumer Information Notices (CINs).
BNZ JP Euro Auto Parts had pleaded guilty to six representative charges under the Fair Trading Act 1986, mostly relating to the sale of 77 used vehicles between August 2017 and December 2018.
The company operates a car and truck wrecker business selling automotive parts in Papakura. At the time of the offending, it was also selling low-priced used motor vehicles, which were advertised on Facebook.
The Commerce Commission reveals BNZ JP Euro offered vehicles for sale on an “as is where is” basis and asked purchasers to sign an agreement acknowledging there was “no warranty implied or given within it”.
Anna Rawlings, chairwoman of the commission, says: “Those statements were misleading, because they suggested that consumers had no rights if something went wrong with the vehicle when in fact the CGA applies to used motor vehicles.
“Traders cannot evade their responsibilities to provide guarantees and remedies under the CGA by using phrases such as ‘as is where is’.
“Where consumers buy vehicles from traders, rather than private sellers, the purchase will always be covered by statutory guarantees, including that 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 Fair Trading Act.”
Rawlings explains the company’s conduct had real impacts on its customers. She notes some buyers felt they had no redress or remedy for faulty vehicles bought from BNZ JP Euro and it left consumers believing they had to resolve problems with the cars themselves.
“In four cases we know of, consumers purchased vehicles that required substantial repairs. In at least two of those cases the cost was nearly the same as the purchase price of the vehicle itself.”
BNZ JP Euro also did not offer CINs with the vehicles it sold. The company pleaded guilty to one representative charge relating to failing to display CINs for 16 vehicles sold between October and December 2018.
It is an infringement only offence and no conviction can be entered for it.
All used motor vehicles must have an accurate and complete CIN when displayed for sale by a used motor vehicle trader. If buying online, the CIN must be displayed by the advertisement for that vehicle.
The commission notes this latest case follows a number of similar prosecutions in recent years, including 2 Cheap Cars Limited being fined $438,000 in July 2019 for its use of “warranty waiver” documents.
A year earlier, Vehicle Logistics Limited was fined $75,000 over misrepresenting consumers’ rights when selling used vehicles online.
Meanwhile, Auckland car dealership $1 Reserve Cars and its owner Adam Cooper were fined a total of $12,000 in October 2018. This was partly for misrepresenting CGA rights by stating, “As this is an auction for a complete package of second-hand parts the [CGA] does not apply”.
