The Australian Competition and Consumer Commission has accepted undertakings from Lander Toyota, part of the AC McGrath Motor Group, to provide refunds to new car buyers who did not receive the full benefit of Wholesale Sales Tax reductions on new motor vehicles, ACCC Chairman, Professor Allan Fels, said today.
"After receiving a consumer complaint, the ACCC wrote to Lander Toyota seeking an explanation of why the price of a new motor vehicle had not reduced by a greater amount given the removal of WST on new motor vehicles from 1 July 2000.
"AC McGrath & Co Pty Ltd, the parent company of Lander, responded quickly to the ACCC's concerns. It conducted an extensive review of all transitional new car contracts across its group. It identified that a small number of errors had been made at two dealerships in calculating the effect of the Goods and Services Tax on new motor vehicles ordered prior to 1 July 2000 but delivered after that date.
"AC McGrath immediately agreed to offer full refunds or refunds of the difference between the price charged and the correct price to all affected customers. The total refunds offered to customers is in excess of $23 000. Lander Toyota will also be providing each customer with an additional $250 scheduled maintenance service voucher. AC McGrath has agreed not to recover the amounts undercharged on 14 Lander Toyota transactions, totalling $9,282.
"The ACCC noted that prior to the introduction of the GST, AC McGrath had implemented an extensive training program for its sales staff on the effects of the GST on the new car prices sold in its dealerships. This training also encompassed detailed information about the effect of the GST on transitional contracts.
"It appeared to the ACCC that the incorrect pricing at Lander Toyota occurred because a limited number of sales staff misunderstood the effect of the New Tax System changes on the contracts already in existence at 1 July 2000. As a result the McGrath Motor Group has undertaken to conduct further trade practices compliance training for all sales staff to ensure that mistakes of this nature do not occur in the future.
"The ACCC believes that other new car dealers should urgently review all transitional contracts for the sale of new motor vehicles to ensure that the full benefits of the removal of WST are passed on to new car buyers.
"Companies should recognise that transitional GST issues can be quite complicated, often raising new issues for even the most experienced sales staff. Extensive training of sales staff is only one element of an effective compliance program. An equally important aspect of an effective compliance program is to conduct regular reviews of transactions to ensure that relevant training is being fully understood and also correctly put into effect by all relevant staff".