Shackel Motor Company acknowledges misleading consumers
Second hand car dealer K2 Motor Company, trading as Shackel Motor Company, acknowledges it made misleading
representations about the price of vehicles offered for sale at its two Wellington car sale yards, and that it made
misleading representations about the availability of gifts in print advertising.
In a settlement with the Commerce Commission, Shackel has acknowledged that its failure to mention additional LTSA fees
in the promotion of its “$7990 car yard” and “$9990 car yard” contained in radio and newspaper advertising, banner
signage at its car yards and on its own website was liable to mislead consumers as to the actual price payable for the
cars being sold.
In addition, Shackel advertised a five day sale in June 2004 during which time it would give away various promotional
gifts, including colour televisions, DVD players and mountain bikes, with its car sales. However, Shackel did not
disclose that consumers first had to enter into a Shackel Motor Company hire purchase finance agreement to be eligible
for any of these gifts.
“Consumers are entitled to be told what they have to pay. They should be able to buy a car for the advertised price.
This price should include LTSA fees and any other costs charged by dealers. They are also entitled to be told when there
are conditions attached to promotions,” said Director of Fair Trading Deborah Battell.
“Businesses are obliged to ensure that information they provide to consumers is accurate. It is important that
information is not withheld or contained only in the small print.
“This settlement is also consistent with the Commission’s view on price advertising. The Commission is currently
prosecuting Qantas and Air New Zealand for advertising fares which, the Commission alleges, mislead people into
believing that it is possible to travel for prices that are not a true reflection of the full cost of travel. Both
airlines are defending these charges and we expect a decision from the courts later this year.”
Breaches of the Fair Trading Act can result in prosecution and fines for a company of up to $200,000.