Court slaps heavy fine on a car dealership in Commerce Commission case

Thursday, 19 July 2018

VLL trades as Ssangyong Takanini and sold trade-in vehicles via $1 reserve auctions on Trade Me.

An Auckland car dealership has been fined $75,000 for misrepresenting consumers' rights when selling used vehicles on Trade Me and failing to display important vehicle information.

Vehicle Logistics, which trades as Ssangyong Takanini, was sentenced on Wednesday in the Papakura District Court on eight charges brought by the Commerce Commission under the Fair Trading Act.

Vehicle Logistics sold trade-in vehicles via $1 reserve auctions on Trade Me.

Five of the charges relate to representations Vehicle Logistics made in its Trade Me listings that the vehicles were offered for sale on an on 'as is where is basis' and claiming no guarantee or warranty applied.

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Vehicle Logistics ignored a number of warnings about its listing from Trade Me.

The commission's consumer manager Stuart Wallace said by stating that vehicles were 'as is where is' in its listings, the trader attempted to avoid its obligations under the Consumer Guarantees Act (CGA).

'Those 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 CGA by using phrases such as 'end of life vehicle' or 'suitable for parts only but runs well',' Wallace said.

'Where 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.'

In sentencing, Judge Gerard Winter said 'the company was lazy if not wilfully blind to its obligations in the internet space'.

He said there is 'absolutely no difference' between physical and online sale.

'Any attempt to contract out is extremely 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.'

The other three charges were for failing to display or provide access to Consumer Information Notices (CINs).

Motor vehicle traders are required to include a CIN, or access to it, in their online advertising for a vehicle, when it is possible for a consumer to buy the vehicle online.

The charges cover 382 vehicle listings between June 2015 and January 2017, offered for sale via two Trade Me memberships operated by Vehicle Logistics sales staff .

Vehicle Logistics repeatedly ignored warnings by Trade Me to correct its errors, the commission said.

The company has since changed the way it listed used motor vehicles on Trade Me, after being informed of the commission's investigation.

Wallace said the commission was increasingly concerned about the conduct of the motor vehicle trade and the number of complaints it received.

'Already this year we have warned Auckland trader Motor Me and its owner over representations made about the quality of vehicles it sold, and we have other open investigations.

'Traders should take particular note of the fine handed down to VLL following the commission's prosecution, and should carefully consider their own conduct,' he said.

The most recent Consumer Issues Report showed that complaints about motor vehicle retail and sales were the third highest category of complaints under the Fair Trading Act to the Commission during the 2017 financial year, after telecommunication service providers and domestic appliance retail.