Australian Competition and Consumer Commission, Chairman, Mr Graeme Samuel, today warned the motor vehicle industry that its advertising practices were not up to scratch and risked contravening the Trade Practices Act 1974.
Earlier this year Guidelines for Pricing in the Motor Vehicle Industry* were circulated throughout the industry.
Mr Samuel said despite the release of the guidelines, advertising in the industry remains problematic.
"Considerable effort was made to ensure the guidelines provided simple and practical advice for those in the industry to enable them to readily comply with their obligations under the Act".
A recent assessment by the ACCC of motor vehicle advertising revealed a high level of non-compliance with trade practices obligations. The ACCC has observed numerous instances, by both manufacturers and dealers, of advertisements with fine print qualifications that:
- had an inadequate font size
- were printed in colours with insufficient contrast to the background
- lack sufficient information about additional fees and charges to enable consumers to assess the price they will be required to pay to acquire the vehicle, and
- had information about additional fees and charges that were isolated from the main price representation.
Other problems included the use of pictures of expensive cars that are not available at the prices advertised. Both print and television advertising were deficient.
"These continuing problems are disappointing given the wide ranging consultation that took place on developing the guidelines to assist the industry", Mr Samuel said.
"The deficiencies go beyond a failure to meet the best practice principles outlined in the guidelines and exposed numerous potential breaches of the Act.
"The ACCC is actively monitoring advertising in the motor vehicle industry. If there is no immediate improvement in the level of compliance, companies risk formal legal action by the ACCC to ensure obligations imposed by the Act are met", Mr Samuel said.