Ford dealer fined record $50,000 for calling used cars new
Published09 Jun 1995
Invercargill Ford dealer, Macaulay Motors Limited, has been fined $50,000 for calling used cars new in the Invercargill District Court today.
This is the highest total fine yet imposed under the Fair Trading Act against a single company.
"The need to deter licensed motor vehicle dealers from the type of dishonest conduct perpetrated upon Messrs Copeland and Bailey [the customers] is manifest," Judge Moran said in his penalty decision released today.
Macaulay Motors, which trades as Macaulay Ford, was prosecuted by the Commerce Commission for leasing a used car while claiming it was new and selling a new car with a used transmission. Judge Moran had found the company guilty of all four charges relating to the matter in April.
Commission Chairman Dr Alan Bollard said the level of fines is a warning that courts will deal severely with deliberate deception of customers. Dr Bollard said the Act applies to all people in trade and prohibits customers being misled.
"It applies if the deception was deliberate or accidental, and Judge Moran has shown that courts will impose large fines when they find deliberate deception of customers," Dr Bollard said.
Judge Moran said the deception had involved Macaulay Ford's Chief Executive Alan McElroy, its New Car Sales Manager Grant Gibson, mechanics and salespeople.
Considerable work was done transferring a used transmission into one vehicle. The odometer in the other vehicle was wound back and documents created to make it appear to be a new vehicle.
Statements made to the customers were totally untrue and known to be so at the time they were made.
Dr Bollard said people buying cars are usually entirely dependent on the word of the seller because they do not have the technical knowledge to check claims made about the car. In the case of a new car they are extremely unlikely to have a mechanic check the car.
"A customer buying a new vehicle from a dealer is entitled to be completely confident of the accuracy and completeness of the information provided," he said. "In this case the dealer had even more credence because it traded under the manufacturer's name.
"The action was deliberate, the company knew about it and it did nothing to make reparations to its customers until after the Commission began its investigation.
"Macaulay Ford has paid the price for taking advantage of customers and deliberately misleading them."
