The Federal Court has found in favour of the Australian Competition and Consumer Commission in proceedings against Goldy Motors, a Perth car dealership, in relation to an advertisement that appeared in the West Australian on 14 June 2000 encouraging consumers to purchase vehicles before 30 June 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 ACCC also took issue with the use of a very small qualifier 'T.A.P' beneath the statement 'No Finance Application Refused!', claiming that, apart from its minute size, some consumers may be unaware of the meaning of the letters 'T.A.P'. They may also have misinterpreted the wording in such a way as to equate 'acceptance' of a finance application with 'approval' of that application.
"The advertisement not only misrepresented the effect of the GST on car prices by inducing consumers to purchase before 30 June, but also misled them as to the likelihood of obtaining finance to do so", ACCC Chairman, Professor Allan Fels, said today. "This impression had the potential to breach the provisions for misleading and deceptive conduct under s.52, s.53(e), and 53(g) of the Trade Practices Act 1974.
Apart from declarations that Goldy Motors had breached the relevant provisions of the Act, Justice Carr of the Federal Court also ordered:
- injunctions preventing Goldy Motors from engaging in similar conduct in the future;
- orders that corrective advertising be published;
- refunds or an alternative form of appropriate compensation for consumers induced by the advertisement into purchasing a car and/or applying for finance before 30 June 2000 as result of the advertisement; and costs against Goldy Motors .
In doing so, Justice Carr rejected submissions on behalf of Goldy Motors that some of the declarations sought by the ACCC were 'an entirely unnecessary exercise'. He also rejected submissions that the ACCC should pay Goldy Motors' costs because the ACCC case gave rise to a 'needless and unnecessary dispute' and that the ACCC had 'misconducted' itself in instituting the legal proceedings.
"The result serves as a reminder to retailers in the lead up to Christmas of the need to inform consumers of all relevant details when conditions are placed on advertised goods and services", Professor Fels said.