Recommendations for the Consumer Law Reform Bill have been reported back to parliament from the Commerce Select Committee, with changes suggested to the Consumer Guarantees Act (CGA) and the Carriage of Goods Act.
Perhaps the biggest change sees all sales between vehicles dealers and the public – including vehicle sales by auction giants such as Turners – subject to the Consumer Guarantees Act (CGA)
“It’s not realistic and will disadvantage the lower-end vehicle buyer – the very people that it was intended to help,” says the Imported Motor Vehicle Industry Association’s David Vinsen.
“All it will do is produce a whole raft of unlicensed, unregistered wholesalers, disposing of lower-priced cars to the public.
“It’s very disappointing. There’s already a dichotomy in that we have a short supply of vehicles and increasing prices for them.
“Dealers will not be able to deal in cheaper vehicles – that market is now closed to them.”
Vinsen cites the case of an Auckland dealer who sold a 2003 Passat, after an AA check, for $3000 – only to face liability for $1500 for repairs.
“There’s no way a dealer can build in sufficient margin to cover that sort of eventuality.”
Changes to the Carriage of Goods Act sees the carriers liability cap increased from $1500 to $2000.
Other suggested amendments were dropped, and there was general opposition from submitters to the changes proposed in the bill as introduced.
The current rights of consumers under the Consumer Guarantees Act against the suppliers of goods do not generally apply when consumers receive goods from suppliers under the Carriage of Goods Act.
In some circumstances consumers are well protected by the Carriage of Goods Act, but there are other circumstances where (especially when they are receiving goods) they have no protection under either the Carriage of Goods Act or the Consumer Guarantees Act.
As introduced, the Bill will apply the Consumer Guarantees Act to the Carriage of Goods Act. However, submitters were concerned that there would be unintended consequences (including additional costs to consumers) from this change.
It is recommended that inserting into clause 35A a new section 5A of the Consumer Guarantees Act is a more precisely focused way of increasing protection to consumers.
This section would provide a new delivery guarantee, to the effect that when a supplier delivered or arranged delivery of goods to a consumer, the goods would have to be received by the consumer when agreed (or in a reasonable time), and the acceptable quality guarantee in section 6 of the Consumer Guarantees Act would apply at and from the time when the goods were actually received by the consumer.
Other key recommendations of the draft Bill are:
– Require traders operating on an internet site, or selling at auction, to disclose trader status to consumers.
– Add a provision to prevent the use of unfair terms in standard form consumer contracts, modelled on a similar provision in the Australian Consumer Law
– Increase the maximum penalties for serious Fair Trading Act offences, and increase the maximum applicable infringement fee.
– Add a power for the Commerce Commission to compel individuals to attend an interview to provide evidence about possible Fair Trading Act offending
– Require that any contracting out of the Consumer Guarantees Act in business transactions be “fair and reasonable” equivalent to the same test for Fair Trading Act contracting out.
