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Internet car dealers give undertakings to the OFT

142/06    4 October 2006

Following action by the OFT and Nottingham City Trading Standards Service, Micronet Showroom, a Nottingham based business which acts as a motor vehicle import agent, has agreed to be more open and fair in dealing with customers.

All of Micronet Showroom's operations are carried out over the internet, including the sourcing, purchasing and importing of vehicles from Europe.

Although Micronet Showroom is presently not trading, the OFT has secured undertakings from David and Richard Loach, who run this business, in order to regulate their future conduct.

Consumers complained to Nottingham City Trading Standards that they had ordered cars from the company, paid for them in full and were then told that delivery would be later than previously indicated and/or the price of the vehicle had increased. Customers also complained they were subjected to long delays for delivery and many cancelled their orders. However, those that did so said that they had difficulty in obtaining a full refund.

The Loach brothers have both signed undertakings promising to reimburse any sum paid by, or on behalf of consumers, within thirty days of the cancellation of the contract and provide consumers with clear information, as specified under the Consumer Protection (Distance Selling) Regulations 2000. They have also agreed not to publish or disseminate misleading advertising, as specified under the Control of Misleading Advertising Regulations 1998.

These undertakings, which have been given without any admission of liability, apply to any businesses carried out by either of the Loach brothers now or in the future.

Christine Wade, Assistant Chief Executive, Consumer Advice and Trading Standards, said:

'Customers should be able to rely on any business to provide accurate information and provide an agreed product or a full refund on time. The OFT will closely monitor the undertakings which have been signed, and will if necessary take court action if these undertakings are breached.'

NOTES

1. If formal undertakings are not complied with the OFT can ask the Court to formalise them. If they are subsequently breached the offender/s may be held in contempt of court and may be imprisoned, fined or have their assets seized.

2. The Enterprise Act 2002 came into force on 20 June 2003, replacing the consumer provisions of the Fair Trading Act and the Stop Now Regulations.

3. The Enterprise Act improves consumer protection by giving enforcers strengthened powers to obtain court orders against traders that breach a range of consumer legislation; controlling activities such as misleading advertising, misleading price indications, lotteries, sale of goods and services, underage sales, estate agency, misleading health claims, trade descriptions, mock auctions, timeshare, unfair terms in consumer contracts, doorstep selling, distance selling, package travel and consumer credit.

4. The Control of Misleading Advertisements Regulations 1988 came into force on 20 June 1988 implementing an EC Directive on misleading advertising. The regulations aim to protect the interests of consumers and businesses from misleading advertising or advertisements that make prohibited comparisons.

5. Advertisement means any form of representation that is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of goods or services, immovable property, rights or obligations.

6. The Consumer Protection (Distance Selling) Regulations 2000, came into force on 31 October 2000. These Regulations gave new rights to consumers in the area of home shopping where transactions take place with no face to face contact, such as online sales, mail order and telesales. Under these Regulations consumers have specific rights including rights to: clear information, a seven-day cooling off period and further protection against fraudulent use of a credit card.

7. The Regulations apply to almost all types of distance shopping but there are exceptions: business to business contracts, certain financial services, sales concluded at an auction, contracts for the sale of land, and sales by vending machine. Some parts of the regulations do not apply to: deliveries of food and beverages for everyday consumption, or to contracts for transport, accommodation, catering or leisure services where these are provided on specific dates or within specified periods, or to timeshare and package holidays, or to contracts made in the course of FSMA regulated business.

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