Car dealers could face widespread refund demands of up to 100% of a used vehicle’s purchase price after publicity surrounding the “misleading” description of former fleet and lease car as having had “one careful owner”.
The Advertising Standards Agency is poised to issue a formal warning to car manufacturers and retailers demanding that specific reference is made to a vehicles former use as a rental car as part of a fleet.
And legal experts from Harcus Sinclair told Auto Express that customers who felt that they had not been aware of such previous use could be eligible for refunds of between 25% and 100% of the value of their car in redress for what would be seen as a violation of the Consumer Protection from Unfair Trading Regulations 2008.
Damon Parker, head of litigation at the law firm, suggested that this could be a growing problem for retailers, having received 200 complaints in just a week from people who claimed they had been mis-sold cars in this way.
The Times newspaper reported that the ASA’s action had followed its ruling, last October, against the FCA Group and Glyn Hopkin.
The retailer ordered that adverts for two Alfa Romeo Guilietta hatchbacks – created using the FCA Group’s website template for used car classified ads – not be used again.
In its conclusions, the ASA determined “because (the adverts) had omitted material information regarding the cars having been previously used for business purposes whilst part of a fleet” that “they were misleading”.
Revealing its subsequent course of action, the ASA said: “We told Glyn Hopkin and Fiat Chrysler Automobiles UK to ensure that their future ads 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.”
The complaint to the ASA about the Glyn Hopkin adverts had been made by campaigner Ashley Rumbold, who set up the website usedcarscandal.co.uk to alert consumers to their potential entitlement to compensation if they feel they were mis-sold a used car as a result of not being told about its prior use as a rental or fleet vehicle.
Abe Smith, chief executive and founder of financial technology experts Dealflo, said: “This is the latest example of just why absolute transparency and clear accountable sales and marketing processes are so important.
Smith added: “While the ASA is encouraging all dealers to review and adjust their advertising, notably online, the threat of litigation still exists if it is deemed that dealers have breached the Consumer Protection from Unfair Trading Regulations (2008).
“While few if any dealers may be able to defend such a position, I urge dealers to act now to change their approach as directed by the ASA and to review their wider sales and marketing processes.
“They need to establish what, if any, other potential gaps in their processes exist and just as importantly ensure they have clear controls in place to evidence that the entire sales and marketing process has been undertaken in a manner that is beyond reproach.”