An Auckland car dealer who told customers they weren't protected by the law because they had bought their car on a "tender" basis has been fined $48,000 for misleading buyers about their rights. He has also been ordered to pay $4,160 in costs.

In the Auckland District Court Judge Bouchier found Mr Marchione guilty of 32 charges of breaching the Fair Trading Act by misleading consumers about their rights and the remedies that were available to them. The charges related to more than 20 customers who bought cars from the yard between August 2001 and November 2003.

Quinton Marchione and his staff got customers at the car yard to sign a form saying that, because they were buying on an "as is where is" and "tender" basis, they would not be protected under the Consumer Guarantees Act or Fair Trading Act.

When buyers experienced problems with their cars and went back to Mr Marchione, he said that the form they had signed meant he could not be held responsible for any problems.

Commerce Commission Director of Fair Trading Deborah Battell said that car dealers could not "contract out" of their legal obligations.

"Mr Marchione may have thought he had found a legal loophole by selling cars through a so-called "tender" process," Ms Battell said.

"Such a loophole does not exist. Consumers have rights under the Consumer Guarantees Act and Fair Trading Act and traders can not deprive them of those rights."

Ms Battell said the Commerce Commission was aware that car dealers were using sham "auctions" or "tender" processes to try and avoid their legal obligations.

"The practice has become widespread so the Commission is pleased that a substantial fine has been imposed to let other car dealers know that they cannot deny consumers their legal rights," Ms Battell said.

Background

Until April 2004 Quinton Marchione traded as a second hand motor vehicle dealer in Mt Wellington, Auckland, usually selling cars as agent for the owner. He used a sales system which involved buyers submitting a written "tender" for the vehicle. The "tender" document used by Mr Marchione states that because the vehicle is purchased on an "as is where is basis" the Fair Trading Act and the Consumer Guarantees Act do not apply.

At the time of the offending Mr Marchione was director of The Auto Auction Car Company Ltd and Autogroup.co.nz Ltd.