Car dealer fined for false AA claims

Monday, 12 December 2016

Zodiac kept promoting itself as an AA appraised used car dealer even after its membership was cancelled.

A car dealer has been fined $105,000 for falsely claiming over the course of a year its cars were appraised by the AA.

Zodiac Motor Company, in South Auckland, pleaded guilty to six Fair Trading charges brought by the Commerce Commission.

The competition watchdog said on Monday the charges related to false representations that Zodiac made by falsely claiming its vehicles were AA appraised and that it was an AA appraised used vehicle dealer.

Zodiac, established in 2006, had been AA appraised in 2012 but lost its membership in 2014 when it failed to meet certain criteria.

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However, the company aired 151 radio advertisements during March last year which claimed all its cars were AA appraised.

The commission said Judge Christopher Field fined Zodiac $105,000 in Manukau District Court, and the company's director, Nezam Anwer, committed to paying whatever part of the fine the company could not cover.

Judge Field said there was a significant degree of 'recklessness' to the offending, through which the company gained an unfair advantage over its competitors.

Commissioner Anna Rawlings said Zodiac's misrepresentations were serious because it had falsely told customers the vehicles they were looking at had been inspected by the AA.

'Purchasing an unreliable vehicle can cause a lot of stress and many consumers take steps to avoid that.

'Most consumers are not in a position to make their own safety and mechanical assessments of a vehicle so traders must ensure representations about the condition of a vehicle and any inspections are accurate.'