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Haven Motors Fined $5,000

Haven Motors Fined $5,000: "Interest Free ...On All Used Vehicles" Was Available Only On Some Cars

In more Commerce Commission action against car dealers, the Nelson District Court today fined Haven Motors Limited $5,000 for breaching the Fair Trading Act by making misleading claims about an "interest free" offer.

Commission Chair John Belgrave said that this was the third prosecution of a car dealer in recent months. The Auckland District Court fined Enterprise Motor Group Limited and one of its subsidiaries a total of $33,000 and the Christchurch District Court fined Landseer Motor Investments Limited, which trades as Donnithorne Simms, $3,000.

"At the beginning of this year the Commission stated that we were unhappy with car dealers' responses to educational work we and the Motor Vehicle Dealers' Institute had carried out," Mr Belgrave said. "We warned that car dealers would be one of our investigation targets, and that prosecutions were likely.

"The three prosecutions completed so far, the further cases pending and the other investigations under way follow from that warning. We intend to continue investigations and enforcement action until compliance improves."

In this case, Haven Motors, which trades as "Haven's of Nelson", published newspaper advertisements in May and June this year offering an interest free deal on all used cars, when the offer did not apply to all its cars.

"The ads stated 'some conditions apply', Mr Belgrave said. "One of the conditions was that the offer was available only on cars less than 10 years old."

In court today, the Commission gave evidence that of the 31 cars Haven had for sale, nine, or 29 percent, were 10 years old or older.

"Advertisers cannot use terms and conditions to make significant changes to what is offered," Mr Belgrave said. "And they certainly cannot use them to contradict the offer.

"Misleading claims are unfair on consumers and competitors. They make it harder for consumers to accurately compare what different businesses are offering. Consumers can be enticed to a business by misleading claims, and once in the door they are more likely to buy. When that happens, both consumers and competitors are disadvantaged."

Background

Section 11 of the Fair Trading Act prohibits misleading conduct in relation to services. In this case, the service offered was an interest free deal.

Commission media releases can be viewed on its web site www.comcom.govt.nz


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