The managing director of a Porirua car dealership and his company, Sunrise Motor Group Limited, were fined in the Wellington District Court today after pleading guilty to multiple charges of breaching the Fair Trading Act. Surya Kumar was fined a total of $9,600 on six charges and Sunrise Motor Group a total of $19,200 on twelve charges.

The charges related to failures to comply with Consumer Information Standards (Used Motor Vehicles) Regulations 2008 and false claims made by Mr Kumar and Sunrise regarding damaged vehicles sold to consumers.

In November and December 2009 Sunrise Motor Group advertised 18 motor vehicles on Trade Me without displaying or providing access to Consumer Information Notices (CIN) as required by law.

In addition, on six occasions between June and November 2009, Mr Kumar and Sunrise Motor Group falsely represented that vehicles had not been imported in a damaged condition, when in fact they had. On two further occasions Sunrise Motor Group failed to complete the mandatory information box on the CIN in relation to vehicles which had been imported in a damaged condition and when questioned by prospective buyers of those vehicles, Sunrise Motor Group and Mr Kumar made false representations about that damage.

Mr Kumar was personally liable for the contraventions of the Fair Trading Act in relation to the CINs in the motor vehicles displayed at his company's premises as he entered the information about on the CINs knowing that information was false. Likewise, he was personally liable for the false statements he made to prospective purchasers about the damage to vehicles being offered for sale by Sunrise Motor Group.

"When traders are questioned about the products they sell, they must answer truthfully. This case shows that not just the company, but also the individual making false and misleading representations, can be prosecuted", said Kate Morrison, Commerce Commission General Manager, Enforcement.

"Purchasing a car is a significant investment and buyers are entitled to have correct information about vehicles so that they can make comparisons and informed choices. Traders must ensure that consumers have access to correct and complete Consumer Information Notices (CINs) for all used motor vehicles offered or displayed for sale."

Motor vehicle traders are required to display correct CINs by the Consumer Information Standards (Used Motor Vehicles) Regulations 2008, which are administered under the Fair Trading Act.

Background

A fact sheet on Consumer Information Notices is available on the Commerce Commission's website at www.comcom.govt.nz/used-motor-vehicles

On 25 August 2010 the Commission wrote to approximately 2500 registered motor vehicle traders reminding them of their obligations in relation to the CIN Regulations and compliance with the Fair Trading Act.

The Commission also published a warning for Trade Me advertisers who sell more than six motor vehicles within as twelve month period on 20 August 2010.   Legislation identifies a person who sells more than six motor vehicles in a twelve moth period as a motor vehicle trader who must be registered.     This media release is available at www.comcom.govt.nz/fair-trading-media-releases/detail/2010/warning-for-trade-me-car-advertisers

The Consumer Information Standards (Used Motor Vehicles) Regulations 2008 requires a properly completed Consumer Information Notice (CIN) to be attached to all used motor vehicles offered or displayed for sale. Supplying a CIN containing incorrect information or failure to supply a CIN in accordance with the Regulations is a breach of the Fair Trading Act and could result in a prosecution and fine. Since the introduction of the regulations in 2003, the Commission has prosecuted a number of motor vehicle traders for not displaying CINs, or for displaying incorrect or incomplete CINs, on vehicles they have offered for sale.

The Fair Trading Act. Court penalties for breaching the Fair Trading Act can include fines of up to $200,000 for a company and $60,000 for an individual. Only the courts can decide if a representation has breached the Act.

More information, including how to register as a motor vehicle trader is available on the Ministry of Economic Development's website www.motortraders.med.govt.nz