THE Victorian Automotive Chamber of Commerce (VACC) is calling for a working group of motor traders and dealers, as well as online website operators selling privately listed cars, to devise ways of protecting consumers from criminal activity and costly scams.

The chamber says in a recent report that despite the best effort of leading online publishers “unfortunately, this (online) system has been infiltrated by unlicensed operators, organised crime gangs and others whose intention is to scam unsuspecting and vulnerable consumers who are in the market for a bargain”. 

“It is also a haven for private sellers to sell vehicles with hidden major mechanical faults, suspect odometer readings, financial encumbrances and vehicles of unknown provenance.”

The report said that the continued presence of criminals and scammers left the industry with no choice but to publish fraud warnings on every private used car listing. The remarks are contained in a response to a National Working Group study of consumer issues pertaining to the used vehicle market by the Victorian Department of Government Services and Consumer Affairs Victoria (CAV).

The report said that the VACC acknowledged that “the on-line classifieds platforms of renown (e.g. carsales.com.au) work tirelessly and dedicate massive resources to identifying and attempting to block these sellers”.

“We have seen many good innovations from the good online classified platforms over the years in an attempt to keep the risk to a minimum, but it is impossible to eradicate all offenders. 

“Consumers must be protected when purchasing used motor vehicles from private sellers. 

“Many vehicles sold privately have known defects that the seller has not declared or have had odometer metres tampered with to help attract a higher price. This was particularly evident post COVID. 

“This is analogous to what happens at dealerships where consumers knowingly trade in vehicles that have major faults that are difficult to identify without having a vehicle forensically assessed on a hoist and other procedures. 

“On-line classifieds providers have another opportunity to reduce the instances of consumers purchasing poor quality used vehicles from private sellers. It is widely accepted that consumers who purchase vehicles from a private seller, or under auction conditions, have little, if any, protection under the ACL.It is a general position that most consumer guarantees only apply if goods or services are supplied in “trade or commerce”.

“Transactions between a private seller and buyer are not ordinarily considered to be transactions made in “trade or commerce” because the transaction is not a business or professional activity. Under this pretext, private sellers of motor vehicles are under no obligation to make any statement with regards to a vehicle’s condition. 

“VACC interacts with many Victorian consumers who have suffered at the hands of private sellers. VACC’s Dr Adiba Fattah says that the VACC is particularly concerned about the presence of private sellers on Facebook Marketplace and seeks Consumer Affairs Victoria (CAV) and Australian Competition and Consumer Commission (ACCC) intervention in the prevention of scam advertising and the selling of poor-quality motor vehicles on this platform.

Dr Fattah referred to a dealer case study cited in the report where a dealer reported: “We purchased a vehicle for $17k with 82,138 km’s from Marketplace and upon bringing the vehicle into stock, realised that we had previously wholesaled the same vehicle the month prior through a major motor vehicle auction house with 243,877 km’s for $9,977.

Dr Adiba Fattah

“This has been reported to Police and the person has been banned from purchasing vehicles from that auction house. The vehicle’s odometer has been whizzed and we are substantially out of pocket. The vehicle is still in our stock.”

Issues such as these have led to the chamber recommending that a text warning to consumers about their lack of rights when buying privately be a mandatory requirement on any vehicle advertised on an on-line classified portal or auction house on-line catalogue for the sale of a used motor vehicle. 

The VACC said: “The statement must be in red type, placed prominently on each individual on-line classified portal advertisement and have a tick box that will require the consumer to acknowledge that they have been informed of the very real risks of purchasing privately.”

The suggested label reads:

“Buying from this private seller compromises any of your rights under the Australian Consumer Law The sale of this vehicle is by a private seller. 

“This means that the vehicle offered for sale does not come with guarantees that can be relied upon under the Australian Consumer Law. You will not be entitled to a replacement or refund for any failure and compensation for any other reasonably foreseeable loss or damage. You will not be entitled to have the goods repaired or replaced if the motor vehicle fails to be of acceptable quality. You will have no protections should the odometer reading be found to be incorrect. You will also have limited protections if there is a financial encumbrance (or other) meaning clear title to this motor vehicle cannot be guaranteed,”

The VACC recommended further that CAV convene a working group including VACC, AADA, the Department of Transport and Planning, on-line classified motor vehicle sales providers and motor vehicle auction houses to: Review data gathered by those entities that will identify and lead to the prosecution of unlicensed persons who participate in the trading of motor cars or holds out in any way as carrying on the business of trading in motor cars.

Michael McKenna

“This should be a retrospective analysis that will allow CAV to verify whether previous persons who have been convicted for such transgressions are still active. 

Meanwhile, VACC policy advisor, Michael McKenna, commenting on the decision by the Nine Entertainment’s Drive website not to publish private car classifieds, told GoAutoNews Premium that the VACC “applauds that kind of thinking”.  

“We support that kind of concept because the more advertising traffic directed towards dealers is not just good for the dealers but also for the consumers. And the consumer should support it too because they can buy with absolute confidence that they are getting all their statutory rights under the law.”