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Motor Vehicle Trader learns the hard way about the FTA

Under the Fair Trading Act traders can't make statements about goods that are false or misleading for potential buyers.

17 March 2021

This recent Motor Vehicle Disputes Tribunal ruling about the sale of a second hand van by a motor vehicle trader to a Trade Me member clearly shows that statements made in listings cannot be misleading or deceptive or sellers could get themselves into trouble under the Fair Trading Act.

The dispute centred around claims made in the listing body that the vehicle had a “tidy and reliable motor” and “Being a Mitsubishi workhorse you are guaranteed a reliable service with the strong 2500cc engine”.

The Tribunal’s Adjudicator Chris Cornwell ruled that these statements were false and misleading and those statements would have misled a reasonable purchaser as there were several mechanical issues with the engine.

This meant that section 9 of the Fair Trading Act had been breached.

The Tribunal awarded the buyer cost of repairs and also costs related to attend the hearings (the unhelpful seller failed to attend the first).

We’ve talked before about the Fair Trading Act but as this case shows, it’s worth repeating:

The Act means all members who are ‘in trade’ need to conduct their business on the basis that false or misleading representations about goods or services are prohibited. Listings must be honest, factual and not claim to be something they are not.

Obviously Trade Me’s terms and conditions require all listing information to be accurate – this applies regardless of whether the seller is “in trade” or not.

The Consumer Affairs website has some pretty good advice that every business owner should think about before listing goods on Trade Me.

Trade Me is disappointed with the actions of the trader but we’ve been in touch and reminded him of his responsibilities as a motor vehicle trader and as a Trade Me member.

Creative Commons image used courtesy of aldenjewell on Flickr.