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Success against car dealer

THE Federal Court has found against Perth car dealer Goldy Motors over an advertisement in The West Australian newspaper on June 14 encouraging people to buy before June 30 because it was their ‘Last chance to buy…GST FREE !!’.

The ACCC was concerned that the representation may have misled consumers because the price of new vehicles was expected to, and indeed has, been reduced with the introduction of the GST on 1 July 2000.

The advertisement not only misrepresented the effect of the GST on car prices by inducing consumers to buy before 30 June, but also misled them as to the likelihood of obtaining finance.

Justice Carr of the Federal Court rejected submissions on behalf of Goldy Motors that some of the declarations sought by the ACCC were “an entirely unnecessary exercise” and issued injunctions preventing Goldy Motors from engaging in similar conduct in the future.

He also rejected submissions the ACCC should pay Goldy Motors’ costs because the ACCC case gave rise to a “needless and unnecessary dispute” and the ACCC had “misconducted” itself in instituting the legal proceedings.

The result serves as a reminder to retailers of the need to inform consumers of all relevant details when conditions are placed on advertised goods and services.

* Professor Allan Fels is chairman of the Australian Competition and Consumer Commission

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