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Car dealer finds non-compliance stalls trading

Media Release

Issued 15 May 2006/130


Roadside car dealer finds non-compliance stalls trading

A motor dealer has been fined over $8,500 in the Christchurch District Court today for lying about the age of cars he was selling and failing to provide purchasers with Supplier Information Notice (SIN) cards. He also agreed to pay over $1,400 in reparations to people who had bought cars from him and had to repair faults.

Andrew Holden Banks, a director of AHB Enterprises Limited trading as Banks Autos, pleaded guilty to five charges of breaching s28 of the Fair Trading Act by failing to attach SIN cards to used motor vehicles he sold. He also pleaded guilty to eight charges of breaching s13(d) of the Fair Trading Act by advertising cars he was selling as being manufactured a year later than they actually were. The company also pleaded guilty to an identical set of charges.

During 2004, Banks bought and sold motor vehicles on a regular basis, and in March 2004 he applied for registration as a motor vehicle trader, trading as Banks Autos, and began to sell cars from the side of the road outside his home. People who bought cars advertised by Banks were not told that he was a registered motor vehicle trader; instead, they were left with the impression he was a private trader.

Banks failed to display SIN cards on the vehicles he was selling. Under the Act, all cars offered for sale by a registered motor vehicle dealer must display a SIN, providing important information about the cars for sale, including date of manufacture.

When purchasers later found faults with the cars, they believed they had no remedy under the Consumer Guarantees Act as they had bought from a private trader. One purchaser found that the roof pillars supporting her windscreen were rusted through and the wrong windscreen had been fitted. The costs of repairs to the vehicle were more than $600 but she did not seek compensation from Banks as she thought she had no protection under the Act.

Banks told the Commission that he had chosen not to tell customers he was a registered motor vehicle trader as ‘once they knew he was a dealer, they wanted everything for nothing and kept coming back to get things fixed.’ He also admitted that he lied about the age of the cars in the advertisements ‘to make them look more attractive’ and that people became aware of the real age of the cars when they came to inspect them.

In sentencing, Callaghan DCJ noted that there was an element of consumer safety involved in this case, and said that the fines would have been significantly higher had Banks not been of such limited means and had he not already agreed to pay reparation.

Director of Fair Trading Deborah Battell welcomed the fine but warned consumers to be wary when purchasing cars, particularly when they are for sale by the side of the road: “Andrew Banks knew what his responsibilities were but made a deliberate decision to try and avoid them. By pretending to be a private seller, he effectively stripped consumers of protections they were entitled to under the Consumer Guarantees Act.

“Buying a car is usually the second biggest purchase people will make in their lifetime. For this reason, they should always get the cars checked out. Prospective buyers are also perfectly entitled to ask the seller whether they are a registered trader or not, and check whether the person is registered by enquiring on www.motortraders.med.govt.nz.

“In this case, the affected parties have been fortunate that the Commission was able to obtain some compensation”, Ms Battell added.


Background

Section 13(d) of the Fair Trading Act 1985 states that people should not misrepresent that goods are new, or manufactured at a particular time.

Consumer Information Standards (Used Motor Vehicles) Regulations 2003 state that a Supplier Information Notice (SIN) must be displayed on used motor vehicles offered or displayed for sale by a registered motor vehicle trader or persons through a car market operator. Private sales are not covered by the regulations.

This is the second prosecution bought by the Commission, and the first in the South Island, in respect of a breach of the Regulations. In R v Ladies Mile Cars Ltd v Sam Alsabiry, the defendants were charged in September 2005 with four breaches of the Regulations.

ENDS

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