New Zealand Law Society - Car dealership and owner fined for CGA misrepresentations

Car dealership and owner fined for CGA misrepresentations

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An Auckland car dealership and its owner have been fined a total of $12,000 on 16 charges under the Fair Trading Act.

The Commerce Commission says the dealership, called $1 Reserve, was fined $8,000 and Adam Cooper was fined $4,000 in the Auckland District Court. Each had earlier pleaded guilty to eight charges.

Six of the charges were for misrepresenting consumers’ rights under the Consumer Guarantees Act (CGA). Trade Me listings for three vehicles included the wording “As this is an auction for a complete package of second hand parts the Consumer Guarantee’s [sic] Act does NOT apply.”

The remaining 10 charges were for failing to display or provide access to Consumer Information Notices (CINs) for 94 vehicles listed on Mr Cooper’s Trade Me membership, between September 2015 and November 2017.

Mr Cooper told the Commission he regretted his failure to include CINs and that he thought he could avoid his CGA obligations by claiming vehicles were a package of second-hand parts.

In sentencing, Judge Mary-Beth Sharp said the ‘second-hand parts’ representations “departed substantially from the truth”, and “there must be general deterrence for offending of this nature.”

“The basic protections offered by the CGA applied automatically to the motor vehicles on offer and this conduct was an attempt to deny consumers those basic protections. Important information contained within a CIN could have informed consumers’ decisions to purchase and $1 Reserve also failed to provide this information,” says Commissioner Anna Rawlings.

$1 Reserve and Mr Cooper had received warnings about 10 vehicle listings from Trade Me for failing to provide CINs on auctions.

“Motor vehicle sales are a focus area for the Commission during 2018/19. We are receiving increased numbers of complaints in relation to the online purchase of vehicles and all motor vehicle dealers need to take careful note of their legal obligations to their customers and make sure that they are operating within the requirements of the law,” said Ms Rawlings.