As dealers begin their annual ‘End of Financial Year’ (EOFY) sales advertising campaigns, the AADA takes this opportunity to remind all dealers of their obligations to ensure they are adhering to the Australian Consumer Law (ACL) when advertising a price or vehicle capability. Recent activity by the Australian Competition and Consumer Commission (ACCC) indicates that the regulator is focussing attention on our industry and the spotlight is expected to be on dealer and OEM advertising over this period.
New and used vehicles. How can they be price advertised?
Vehicle advertising at a dealership can be done by dealers, OEM’s or both as part of a cooperative program, but in all cases all advertising must comply with the ACL.
To ensure that your dealership(s) comply with the ACL you should refer to the ACCC publication Pricing manual for the motor vehicle industry. Dealers should ensure that any external advertising or marketing agency you are working with are also provided with a copy of the ACCC pricing manual.
Recent ACCC proceedings against vehicle manufacturers and distributors.
The importance of complying with the ACL guidelines when advertising the sale of a vehicle (new, used or demonstrator) with regards to a vehicles price and capabilities has magnified when we consider the following two recently instituted proceedings taken by the ACCC.
- The ACCC has instituted proceedings in the Federal Court against Jayco Corporation Pty Ltd (Jayco), Australia’s largest caravan and recreational vehicle manufacturer, for making allegedly misleading representations when advertising certain models of its RVs in ‘off road’ conditions.
- The ACCC has instituted proceedings in the Federal Court against Ateco Australia Pty Ltd trading as LDV Automotive Australia, (LDV) for allegedly making misleading representations to consumers about the durability and suitability of particular models of LDV branded vehicles in breach of the ACL. The ACCC alleges that those vehicles had a propensity to rust or corrode within five years of being manufactured.
What does this mean for dealers?
In both of the most recent instances, the parties listed as respondents in the ACCC instituted proceedings are a manufacturer and a distributor. This does not preclude dealers from future actions by the ACCC or other state-based regulators alleging false or misleading practices, including price advertising. Dealers should ensure that all of their advertising campaigns meet the ACL guidelines.
A false representation is one that is incorrect or contrary to fact. As with the prohibition on misleading conduct, your intention to deceive or otherwise is irrelevant. You may breach these provisions regardless of whether your actions were deliberate or whether you did not know the representation was false at the time of making.
What has been the ACCC’s specific position regarding false and misleading representations when advertising certain models of vehicles?
The ACCC is on the record as stating that if a vehicle is depicted in advertisements in a particular setting, or claims are made about it, that consumers have a right to expect such images and words reflect the intended use of the product.
The ACCC also state that a new car is a significant financial purchase, and consumers rightfully expect that the vehicle they purchase will live up to the quality and uses that it was advertised to include.
It is unfortunate that the ACCC and the state-based offices of fair trading continue to ignore the private-to-private market advertising of vehicles on different online classifieds provider platforms. AADA continues to remind those agencies of the consumer harm those platforms are enabling.