An Australian Competition and Consumer Commission investigation into Goods and Services Tax advertising claims has resulted in Werribee Motor Traders Pty. Ltd. (Werribee Motor Traders), trading as Werribee Mitsubishi and Daihatsu, giving a court-enforceable undertaking to the ACCC.
During a recent promotion, Werribee Motor Traders distributed a leaflet promoting a liquidation sale, primarily for used cars, in the Melbourne suburbs of Williamstown, Laverton, Altona and Altona Meadows. The advertisements made a representation to consumers to ‘Beat the GST Price Increase’.
"The advertisement gave consumers the impression that the price of used motor vehicles will rise once the GST was introduced, and that consumers should buy used motor vehicles now so as to ‘Beat the GST Price Increase’," Acting ACCC Chairman, Mr Allan Asher, said today.
"The ACCC believes that the net effect of the removal of the wholesale sales tax and the introduction of the GST on new motor vehicles will flow through to the used car market resulting, in the short term, in a fall in the price of used motor vehicles. Further, in the longer term, lower new motor vehicle prices may result in a lower demand for used motor vehicles, with a subsequent fall in their price. It is therefore misleading to represent that consumers who purchase motor vehicles prior to the introduction of the GST in July 2000 will be ‘beating the GST price increase".
Werribee Motor Traders has acknowledged, consistent with the ACCC’s understanding, that it had misrepresented to consumers the impact of the introduction of the GST on the price of used motor vehicles.
Werribee Motor Traders has provided the ACCC with a court enforceable undertaking that it will:
- not publish the same or similar advertisements;
- place corrective advertising apologising for the misleading representations; and
- develop and implement a trade practices corporate compliance program.
"This investigation shows that the ACCC will not tolerate misrepresentations about the effect of the GST. The ACCC will ensure that during the transitional phase of the New Tax System consumers are not misled by false advertising claims.
"The ACCC has welcomed the undertakings provided by Werribee Motor Traders as an effective and timely outcome and acknowledges its cooperation in this matter".
More information about the ACCC's role in respect of the New Tax System can be found on the ACCC’s website at www.accc.gov.au or by calling the ACCC Price Hotline on 1300 302 502 for the cost of a local call.