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Shackel Motor Co acknowledges misleading consumers

Shackel Motor Company acknowledges misleading consumers

Second hand car dealer K2 Motor Company, trading as Shackel Motor Company, acknowledges it made misleading representations about the price of vehicles offered for sale at its two Wellington car sale yards, and that it made misleading representations about the availability of gifts in print advertising.

In a settlement with the Commerce Commission, Shackel has acknowledged that its failure to mention additional LTSA fees in the promotion of its “$7990 car yard” and “$9990 car yard” contained in radio and newspaper advertising, banner signage at its car yards and on its own website was liable to mislead consumers as to the actual price payable for the cars being sold.

In addition, Shackel advertised a five day sale in June 2004 during which time it would give away various promotional gifts, including colour televisions, DVD players and mountain bikes, with its car sales. However, Shackel did not disclose that consumers first had to enter into a Shackel Motor Company hire purchase finance agreement to be eligible for any of these gifts.

“Consumers are entitled to be told what they have to pay. They should be able to buy a car for the advertised price. This price should include LTSA fees and any other costs charged by dealers. They are also entitled to be told when there are conditions attached to promotions,” said Director of Fair Trading Deborah Battell.

“Businesses are obliged to ensure that information they provide to consumers is accurate. It is important that information is not withheld or contained only in the small print.

“This settlement is also consistent with the Commission’s view on price advertising. The Commission is currently prosecuting Qantas and Air New Zealand for advertising fares which, the Commission alleges, mislead people into believing that it is possible to travel for prices that are not a true reflection of the full cost of travel. Both airlines are defending these charges and we expect a decision from the courts later this year.”

Breaches of the Fair Trading Act can result in prosecution and fines for a company of up to $200,000.

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