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27/10 18 March 2010
The OFT has identified a number of concerns in the £24bn second hand car dealer market and is set to crack down on dealers who break the law.
The OFT has today published its market study into second hand car sales by franchised and independent dealers which finds the market is often not working well for consumers. The OFT believes that the relevant legislation is sufficient but more needs to be done to ensure dealers are aware of the law, consumers are aware of their rights, and dealers who fail to comply face a real threat of effective enforcement action by Trading Standards and the OFT.
The OFT's report finds that:
The OFT has produced new guidance for the car industry providing clarity on the Sale of Goods Act and Consumer Protection from Unfair Trading Regulations. Though it is hoped this guidance improves business practices in the market and reduces complaints, if matters don't improve, the market study has provided the OFT with clear enforcement priorities.
Heather Clayton, Senior Director of the Office of Fair Trading's Consumer group, said:
'Buying a second hand car is an expensive purchase for many people. Many dealers provide high standards of service and comply fully with the law but there continues to be high numbers of complaints to Consumer Direct which are often due to dealers' refusing to deal with legitimate complaints or provide appropriate redress.
'We are issuing OFT's guidance to the industry and expect all second hand car dealers to be aware of their legal obligations. Along with our Trading Standards partners, we will take action against those dealers who continue to ignore the law.'
The market study was prompted by consistently high numbers of consumer complaints. Last year saw a rise of five per cent in complaints about second hand car sales with nearly 72,000 consumers reporting problems to the OFT-operated advice service Consumer Direct, making it the most complained about sector.
1. The study focused on sales by dealers rather than private sales between individuals. The study worked closely with the second-hand car industry, local authority Trading Standards Services, consumer bodies and other interested parties.
2. OFT market studies are carried out under section 5 of the Enterprise Act 2002 (EA02) which allows a market-wide consideration of both competition and consumer issues.
3. The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) contains a general prohibition against unfair commercial practices and, in particular prohibitions against misleading actions, misleading omissions and aggressive commercial practices. The Regulations are enforceable through the civil and criminal courts.
4. The Sale of Goods Act 1979 requires among other things that a car is of satisfactory quality or fit for its purpose when it is sold.
5. The OFT is unable to provide advice or resolve individual complaints for consumers. Consumers who are concerned they have been unfairly treated by a company can contact Consumer Direct (tel: 08454 04 05 06, or visit the Consumer Direct website).
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