A misleading advertising campaign has cost a Pendragon dealership £12,500 in fines and costs.
Trading Standards last week prosecuted the Vauxhall outlet, at St James Square in Gateshead, after finding a heavily-promoted 0% finance offer applied to only a handful of cars.
The dealership, formerly a Reg Vardy outlet until Pendragon’s takeover, was found guilty of two offences under the Consumer Credit Act 1974.
It was fined £2,000 per offence, with £8,000 costs and £500 compensation payable to one customer.
Gateshead Magistrates Court was told that in 2007 the business displayed banners and car signs and used
radio adverts highlighting a 0% finance scheme on an “outstanding” range of used cars.
Trading Standards investigated following a complaint from a customer who bought a car displaying the offer, but was charged 4.2% interest.
The probe discovered that on the relevant date, only six cars – 11% of the used stock – qualified for the 0% offer. Advertising regulations require 66% to qualify for the highlighted typical APR rate.
The court was told that the process for picking the qualifying stock was unclear to staff and that cars in the “outstanding” range were sometimes picked only because they were ageing stock.
Pendragon had previously been warned by Nottingham Trading Standards and the Advertising Standards Authority to make clear what was meant by “outstanding” in its adverts, but had failed to follow the advice.
Richard Ferry, Trading Standards spokesman, said: “Our main concern has always been that customers were misled into thinking they were getting a good deal.”