South Auckland car dealership fined for false claims

Issued 12 December 2016
Release no. 62

South Auckland car dealership fined for false claims its cars were AA appraised

Car dealer, Zodiac Motor Company Limited (Zodiac) has been fined a total of $105,000 in Manukau District Court for making false claims that its cars were AA appraised and that it was an AA Appraised Used Dealer.

Zodiac’s sole director Nezam Anwer also entered into undertakings with the Commission that he would pay any part of the fine that the company did not pay.

The dealership pleaded guilty to six charges brought by the Commission under the Fair Trading Act 1986. These related to false representations over the course of a year that vehicles advertised for sale by Zodiac were AA appraised when they were not and that Zodiac was an AA Appraised Used Vehicle dealer when it was not.

Even after Zodiac became aware that AA had cancelled its membership as an Appraised Used Vehicle Dealer, Zodiac continued to promote itself as one on its website, at its car yard and in radio advertising. Zodiac also advertised individual vehicles on its website as having been AA appraised when they had not been.

In March 2015 Zodiac aired 151 radio advertisements stating “all cars are AA appraised” when Zodiac was not able to obtain AA appraisals for its vehicles as it was no longer an AA Appraised Used Dealer.

Judge Field said in sentencing that there were a number of aggravating features of the offending, including that through this false advertising Zodiac gained an unfair advantage over its competitors.

“There is a significant degree of recklessness in relation to the offending… The statements were a complete departure from the truth,” he said.

Commissioner Anna Rawlings said that Zodiac’s misrepresentations were serious because they appealed to consumers by giving the dealership an air of trustworthiness.

“Zodiac provided consumers with a measure of comfort that the vehicle they were considering purchasing had been inspected by an impartial, reliable body – when it hadn’t,” she said.

Ms Rawlings adds that a car is an important purchase for most consumers and for many low income consumers it will be their most significant asset.

“Purchasing an unreliable vehicle can cause a lot of stress and many consumers take steps to avoid that. Most consumers are not in a position to make their own safety and mechanical assessments of a vehicle so traders must ensure representations about the condition of a vehicle and any inspections are accurate,” she said.

ends

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