AM Online

Pendragon overturns £134,000 conviction over ‘misleading’ used car advert

Pendragon has successfully appealed its £134,000 conviction for advertising an ex-rental car as having “one previous owner”.

The judgement was overturned during an appeal hearing at Teesside Crown Court this week after Judge Howard Crowson said the ex-business use of the car would have had no effect on its value.

A spokesman for Pendragon said: “We are delighted that having succeeded with our appeal, the conviction has been quashed.

“We would like to thank our legal team led by Jonathan Kirk QC, and Geldards LLP and also thank the independent expert, Dean Bowkett.

“We are extremely pleased that the judge remarked that the courts exist to protect consumers against bad bargains where the playing-field is not level, and not irrational prejudice against ex-business use vehicles whose values are entirely unaffected.”

In November last year Pendragon Motor Group was convicted of unfair commercial practice after advertising an ex-rental car as having one registered keeper at an Evans Halshaw dealership in Middlesborough.

The prosecution followed a compliant from customer who, in April 2017, deemed the condition of a vehicle bought from the retailer, after paying £200 to have it brought to his home, as unacceptable.

The buyer had not purchased the vehicle and his deposit was returned in full.

The customer reported the case to Trading Standards after enquiries discovered that the one registered keeper was in fact Enterprise Leasing Company, however.

At the original trial, District Judge Helen Cousins, said the average consumer would be “misled” by such a description and should have been told that the one registered keeper was a car rental business, the Northern Echo reported.

She later fined Pendragon £134,000 and ordered that they pay £9,360 in costs.

Following Judge Crowson’s decision to overturn her decision at Teesside Crown Court, Judith Hedgley, Middlesbrough Council’s head of public protection, said that the original case had been brought in good faith, before expressing her “disappointment” at the successful appeal.

She said: “We remain of the view that consumers should be told of the previous history of a used car, especially if it was used as a rental vehicle.”

Sur Robinson, director at the National Franchised Dealers Association (NFDA) said that Pendragon’s successful appeal was “extremely positive”, however.

She said: “The NFDA has been working on clarifying the issues surrounding the use of multi-user vehicles, and has also commented on the CTSI proposed guidance where the issue has not been addressed accurately.”

ASA ruling put microscope on ex-fleet cars

An Advertising Standards Agency ruling in October 2017 said that “vehicles that were ex-fleet (having previously been used for business purposes), including whether the car had been driven by multiple users was material information likely to influence a consumer’s transactional decision” and therefore that because the adverts “had omitted material information regarding the cars having been previously used for business purposes whilst part of a fleet, we concluded that they were misleading.”

At the time, Graham Jones LL.B (Hons.) FIMI, director of legal services, Lawdata, said the ASA ruling itself doesn’t give rise to a claim for compensation. Its effect is limited to requiring the named advertisers to ensure that future adverts “did not mislead by omitting information that they had to show that their vehicles were previously used for business purposes whilst part of a fleet.”

However, he said it highlighted the importance of complying with the Consumer Protection Regulations 2008.

The regulations prohibit both misleading actions and misleading omissions, which are defined as matters which cause “or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.”

The argument being promoted is that an average consumer would be less inclined to purchase an ex-fleet car due to concerns about increased levels of wear and tear or previous maintenance, and therefore the information should be disclosed.

Click here for used car best practice and procurement insight

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment


No comments have been made yet.