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$14,000 In Fines For Ford Dealers Set Precedents

$14,000 In Fines For Ford Dealers Set Fair Trading Precedents For Newspaper, Magazine And Other Print Advertising

The convictions of Ford Dealers, Avery Motors Limited and Stevens Motors Limited, have set important Fair Trading Act precedents about small print.

"The Commerce Commission's view, that newspaper, magazine and other print advertising cannot use small print to correct a misleading claim, had not previously been tested in court," said Commission Chair John Belgrave. "All previous convictions had involved either guilty pleas or television advertising.

"Judge Henwood's decision is a useful tool for consumers to use to protect themselves, and for advertisers to use to keep inside the law."

In fining the Ford dealers a total of $14,000 today, Judge Carolyn Henwood said that the Act tries to alter the behaviour of all vendors so that consumers can have better protection.

In this case Avery Motors published advertisements in Wellington community newspapers The Norwester and the Kapi-Mana News, and Stevens Motors published advertisements in The Motor Guide.

Avery Motors' advertisements featured photographs and detailed descriptions of 14 cars and offered in bold print a "$2,500 minimum trade-in". Stevens Motors' advertising had photographs and descriptions of eight cars and in bold print offered a "$1,000 giveaway".

The small print in both companies' advertisements stated that the offers did not apply to the cars pictured in the advertisements.

The Commission alleged that the advertisements were misleading and breached the Act.

The companies pleaded not guilty and disputed that the advertisements were misleading or that they companies had in any way engaged in conduct that was liable to mislead the public.

Judge Carolyn Henwood convicted both companies, saying that they offered with one hand and took away with the other.

She stated about Avery Motors' advertisements: "The offer of '$2,500 minimum trade-in' is misleading and meaningless, as it does not apply to the attractive vehicles photographed in the advertisement. The average shopper has no way of knowing what the offer does apply to. It is just a shallow device to entice the customer."

She stated about Stevens Motors' advertisement: "It is deliberately designed to make the cash offer look as if it applies to the photographed cars, when it does not."

Judge Henwood also stated: "In addition, both advertisements have the effect of attracting customers to the car yards by using misleading material, thereby getting an edge over other business competitors."

She fined Avery Motors a total of $8,000 and Stevens Motors $6,000.

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


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