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New laws to crack down on 'rogue' car dealers

New powers to protect consumers from 'Arthur Daley' car dealers have been introduced by the Government.

The new 'Stop Now Orders' are aimed at stopping the operations of rogue traders in the UK and abroad through court injunctions. Failure to comply to an order will be treated as contempt of court and punishable by an unlimited fine or imprisonment.

The new law will come into force on June 1.

The consumer bodies able to use the new powers include the Office of Fair Trading, local authority trading standards departments and enforcement bodies in other EU members states. The areas covered by the 'Stop Now Orders' also include misleading advertising, doorstep selling, consumer credit, timeshare and distance selling.

The new legislation was welcomed by the RMI.

Chief executive, David Evans, said: “Consumers should be able to feel completely confident that when they buy a car, they know they are not being duped into paying for a vehicle which has had its mileage altered.

“This new legislation from the Government is something we have been demanding for many years. The legitimate, regulated end of the motor vehicle retail trade has for too long been tarred with the same brush as rogue dealers, but now we should begin to see an end to unacceptable practices in the motor trade.”

The DTI provided the following examples of where the 'Stop Now Orders' could be used in the motor trade.

  • Swindon Trading Standards Service fear that a car dealer in their area may have one of the worst records in the country in complying with consumer protection legislation.

    Since 1983 they have received 326 complaints about the dealer. The trading standards service and police have prosecuted the dealer in the magistrates and crown courts seven times for a variety of offences. These include applying false descriptions to cars such as 'immaculate bodywork' and 'it's got a new engine'.

    He was convicted in 1997 on 10 charges of trading without a consumer credit licence under the Consumer Credit Act, but trading standards service suspect this did not deter him from continuing to do so. Where complaints did not reveal criminal offences complainants have had to resort to the civil courts for a remedy.

    “The additional powers to be given to trading standards departments should help them clamp down on rogue car dealers like this to ensure they comply with the criminal and civil law and do not deceive consumers about the cars they selling.

  • Consumer credit legislation requires that premiums for compulsory payment protection insurance must be taken into account when calculating the annual percentage rate of charge (APR). However, in the past some lenders have not included premiums and have advertised a lower APR than they should have done. Consumers may have been misled into thinking they were getting a better deal than they really were. Stop Now Orders will put an end to this type of practice.

  • Where goods or services, for example a new motor vehicle, are bought on credit arranged through the supplier then both supplier and credit provider are jointly and equally liable for breach of contract. This provides added protection to the consumer especially should the supplier go out of business. New Stop Now Orders could be obtained against credit providers who refuse to be a party to a claim for breach of contract.
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