ABC Motor Group Fined $13,500

Issued 30 May 2001

Third Car Dealer Fined Under Fair Trading Act In Nine Days: ABC Motor Group Fined $13,500

When the Auckland District Court fined ABC Motor Group Limited $13,500 today, it was the third car dealer fined in nine days for breaching the Fair Trading Act.

Commerce Commission Chair John Belgrave said that the Act prohibits false or misleading claims and also prohibits misleading or deceptive conduct.

Last week the Wellington District Court fined two linked companies, Avery Motors Limited and Stevens Motors Limited, a total of $14,000.

All three companies had used similar newspaper advertising. In bold print they advertised special offers, and the advertisements featured photographs, specifications and prices of cars. Small print stated that the special offers did not apply to the cars featured in the advertisements.

ABC Motor Group, which trades as ABC Direct Imports Motor Group LMVD, offered $6,000 off car prices or a $6,000 minimum trade-in.

"Small print cannot be used to substantially change or qualify the impression given by advertising," Mr Belgrave said.

"Photographs, pictures and all important terms and conditions should match the offer and must be clearly and accurately disclosed. To do anything else risks breaching the Act.

"Comments from these three companies, that many car dealers use such ads, and information from our surveillance of advertising suggest that using photographs that did not match the advertised offer is a common problem.

"It was a previously a problem in the furniture retailing industry, but reduced considerably after the Commission took a series of prosecutions.

"More enforcement action is likely against car dealers until compliance improves."

Background

The conviction of ABC relates to advertisements published in the New Zealand Herald on August 24 and September 2 last year, and in the Auckland edition of the Motor Guide on July 27, August 3, August 24 and August 31 last year.

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