Rockingham car dealer fined over warranty deception (All Commercials Pty Ltd)

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A Rockingham car dealer, its Director and a sales representative have been fined a total of $19,400 and ordered to pay Court costs of $7,263 by the Rockingham Magistrates Court after making false and misleading statements regarding the warranty on a used vehicle.

All Commercials Pty Ltd, its Director/yard manager and a sales representative were charged by Consumer Protection for being in breach of the Motor Vehicle Dealers Act (MVDA) and the Australian Consumer Law (ACL). The Director/yard manager and sales representative were granted spent convictions.

The charges arose from the sale of a 2004 Ford Falcon to a consumer in July 2012. The sales representative of the company offered the buyer two prices for the vehicle - $6,500 with no warranty or $6,750 with a warranty. Under the MVDA, this vehicle was subject to a three-month statutory warranty at no extra cost. A form stating that the vehicle was not subject to a warranty was attached to vehicle, instead of the correct form which states that the vehicle is subject to a statutory warranty. During contract negotiations, the buyer agreed to purchase an ‘after market’ warranty insurance for $250 believing that the vehicle was not covered by a statutory warranty.

Shortly after purchase, the vehicle was serviced and it was found that the water pump needed to be replaced. The buyer approached the car dealer and the sales representative who repeated that there was no warranty obligation by the dealer and then organised to have the repairs carried out under the extended warranty that the buyer had purchased.

On 19 September 2014, both the company and Director/yard manager were each fined $4,500 on the ACL charges and $3,000 on the MVDA charges. The sales representative was fined $4,000 on the ACL charges and $400 on the MVDA charges. All three were ordered to pay Court costs of $2,421 each.

Commissioner for Consumer Protection Anne Driscoll said this type of deception over warranty obligations by car dealers was totally unacceptable and damages the reputation of the industry.

“Depending on the age of the car and the kilometres driven, buyers of second hand cars are entitled to a clear period of warranty from the dealer, and the Australian Consumer Law also provides some guarantees to ensure vehicles are of reasonable quality,” Ms Driscoll said.

“It’s illegal for dealers and sales representatives to mislead consumers and sell ‘after market' warranty insurance on the basis that there is no guaranteed warranty, where in fact there is a statutory warranty in place. Consumer Protection will seek to put a stop to this behaviour.

“Consumers who are considering purchasing ‘after market' or extended warranties should first check to ensure that the vehicle isn’t already covered by a guaranteed warranty that is available to them by law. Any dealer who fails to honour their legal obligations over warranties should be reported to Consumer Protection.”

On 18 September 2014 a Wangara motor vehicle dealer and its sole Director were ordered to pay a total of more than $80,000 in fines and costs by the Joondalup Magistrates Court for selling used vehicles without a warranty.

Ridgehaven Holdings Pty Ltd, trading as Wanneroo Cars and Commercials (now closed), and its sole Director Brian John Whitehead pleaded guilty to 29 charges under the ACL and 10 charges under the MVDA. The charges relate to the sale of 29 vehicles between October 2011 and September 2013 where the dealership had buyers sign a statement that no warranty would be provided.

Further information on used car warranties is available on the Consumer Protection website www.commerce.wa.gov.au/motorvehicles or by emailing consumer@commerce.wa.gov.au or by calling 1300 30 40 54.

END OF RELEASE

Media contact (Consumer Protection)

 

Consumer Protection
Media release
23 Sep 2014

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