OFT urges Trading Standards teams to get tough with second hand car dealers

Local authorities should conduct a greater amount of enforcement action against second hand car dealers who break the law, the Office of Fair Trading has said.

In a study into the £24bn second hand car sales market, the OFT described the relevant legislation as “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”.

Concluding that the market is often not working well for consumers, the report found that:

• The vast majority of second-hand car faults come to light within three months. Despite the dealer’s responsibility to fix the problem, nearly 30% of consumers who contacted their dealer said the problem was not rectified
• Consumers could potentially over-pay to the tune of around £580m a year as a result of illegal clocking, which involves adjusting a vehicle to show false mileage. A number of recommendations are made in a bid to tackle this problem
• Some dealers may be in breach of the law by pretending to be private sellers to evade their legal obligations to consumers
• One in 11 car dealers rely on illegal disclaimers about the car’s history and condition, and
• Many dealers fail to disclose what mechanical and other pre-sale checks they have carried out.

The OFT said it was encouraged by the use already made by many Trading Standards teams of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) in tackling some of the most serious and harmful practices in the second hand car market.

It called for more to be done in this regard, although it recognised that investigations and evidence gathering in this area can be resource intensive. “We also recognise the competing demands on limited resources for enforcement work within local Trading Standards Services,” the OFT said.

The report suggested that there is a key role for the OFT in providing assistance to Trading Standards. This is particularly in suggesting enforcement priorities, providing guidance to both enforcers and the industry on its interpretation of the law, and testing the law where there are any areas of uncertainty about its application.

The OFT also produced new guidance for the car industry on the Sale of Goods Act and the CPRs. The watchdog hopes that this will improve business practices in the market and reduce complaints, but the market study provides the OFT with clear enforcement priorities if matters do not improve.

Heather Clayton, senior director of the OFT’s consumer group, said: “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.”