A Christchurch Ford dealer, Team Hutchinson Ford, has been fined $2,000 for misleading people about the price of cars after a warning from the Commerce Commission.
The Commission was concerned about hidden costs of up to $8,000 not being revealed in the advertising.
In March the company advertised Ford Lasers and Festivas for sale for a deposit of $5,000 and payments of $299 a month for three years. What the advertisement did not say was that the final payment on the cars would be a lump sum of between $6,000 and $8,000.
Hutchinson Motors Limited, trading as Team Hutchinson Ford, pleaded guilty to one charge under the Fair Trading Act brought by the Commission in the Christchurch District Court today.
"A lot of advertising focuses on price and price savings and it is not enough that the information is factually correct, it must be complete too. This means any hidden costs and conditions must be clearly explained," Commission Chairman Dr Alan Bollard said.
"The impression advertising creates is vital, it must describe the whole deal being offered. Fine print saying 'special conditions apply' will not stop people being misled if the conditions are different to the impression given in the advertising."
In October last year the Commission wrote to Team Hutchinson Ford and the company which handles all Ford motor vehicle financing, Ford Credit Company. The companies were told that advertising that did not reveal large final payments was at risk of breaking the law.
"We make considerable effort to educate businesses about the law. If they ignore our advice or warnings, we will prosecute them," Dr Bollard said.
"While the penalties in this case were small compared to the $100,000 maximum under the Act, no company wants to face the fines, legal costs and bad publicity that come with a conviction."
