More Commission action against car dealers: Mitsubishi dealer fined $3,000 for misleading claims about prices of new cars
Published15 Aug 2000
Commerce Commission action against misleading claims by car dealers continued today with Christchurch Mitsubishi dealer, Landseer Motor Investments Limited trading as Donnithorne Simms being fined $3,000 for making misleading claims about the prices of new cars.
Commerce Commission Chair John Belgrave said that the Commission alleged that Donnithorne Simms had breached the Fair Trading Act by advertising weekly payments for cars but not disclosing deposits and large final payments. The Advertisements had been published in The Press in July last year.
Donnithorne Simms had advertised Mitsubishi Galants as available on a "special finance" offer of from $110 a week for station wagons and from $99 a week for a different model.
The advertisements did not disclose addition costs of more than $17,000 for the station wagons and more than $16,000 for the other cars. The additional costs were a deposit of more than $6,000 and a final "balloon payment" of more than $10,000.
Mr Belgrave said that the Commission had warned Donnithorne Simms in June last year about its advertising. In July that year the company's advertising again came under scrutiny and the Commission decided to prosecute.
After a defended hearing, the Christchurch District Court found Donnithorne Simms guilty on July 20 and sentenced it today.
Judge David Holderness rejected the company's defence that it had made a reasonable mistake. Judge Holderness stated in his judgment that the company had shown a lack of care when it drafted its advertisement, had shown significant lack of care when The Press provided a proof for checking and should have been vigilant after receiving a warning from the Commission.
Mr Belgrave said that car dealers are one of the investigation targets listed by the Commission in its Annual Plan.
"We have done a lot of educational work together with the Motor Vehicle Dealers' Institute, and we will continue to," Mr Belgrave said. "But, in this industry, education on its own is proving insufficient.
"In our view, false or misleading claims are disappointingly common. Investigations of claims made by car dealers will continue and more enforcement action will be taken as necessary."
