These are the findings of a new report by the Consumer Policy Research Centre (CPRC), which surveyed over 1000 Victorian car owners and conducted in-depth interviews with those who had tried to navigate the Victorian Civil and Administrative Tribunal (VCAT) system for complaints.Ìý

“What we found was that a lot of people have a faulty car, it’s hard to get a fix and dealers aren’t working with people to get problems fixed early,” says CPRC CEO Erin Turner.Ìý

“When you need to escalate a complaint it’s really difficult, it’s long, it’s costly and therefore most people don’t get to a formal complaints process because it is too hard.”Ìý

The report, commissioned by the Consumer Action Law Centre, found that from the point of knowing about a fault with a car to getting a resolution at VCAT, the consumer had to go through at least 60 different steps. Many of these included long delays, documentation in overly legal language and assessments of the vehicle that cost the consumer thousands of dollars.Ìý

“This isn’t a system you would design if you want to help people solve problems, this is a system where people succeed despite VCAT, not because of it,” Turner says.Ìý

Ashleigh’s storyÌý

When Ashleigh Bok purchased a second-hand Fiat earlier this year from a dealership in Melbourne’s western suburbs, she had issues with the car almost immediately.Ìý

“I asked them to fix the car because it still had three months’ warranty, but basically they car-napped my car. They would take it for weeks at a time pretending to fix it, but it would just sit there at the dealership,” she says.Ìý

She says the loss of the vehicle has led to significant financial issues for her and her partner, who is unable to find employment without access to the car.Ìý

“We are stuck in debt and he can’t work. We are finding it very hard to buy groceries now,” she says.Ìý

No incentives to fixÌý

Turner says the report highlights the lack ofÌý incentives for car dealers to resolve issues with customers earlier in the process. Dealers are benefitting from a long, drawn-out complaints process that can take up to two years for a resolution.Ìý

“There are certainly some businesses out there that are taking advantage of the system and relying on people dropping out of the process,” Turner says.Ìý

She adds that in many cases customers accepted “lowball” offers of compensation from the dealer rather than going through the long process of fighting for their full consumer rights, due to the difficulties of the complaints tribunal process.Ìý

“This research is pretty definitive, VCAT isn’t working for consumers that go through it,” she says.Ìý

Consumer guarantees and ombudsman schemesÌý

Across Australia there are currently no penalties for businesses that fail to honour consumer guarantees to a right to repair, refund or replacement. In many cases dealers can breach the law with no financial consequences.Ìý

That was the case with the Aboriginal couple Peter and Marilyn in the Far North Queensland community of Wujal Wujal, where ÌÇÐÄVlog reported on lemon car issues facing remote First Nations people last year.Ìý

Their car had broken down on the same day of purchase and after a lengthy, year-long process, they eventually won against their dealer in the Queensland Civil and Administrative Tribunal. The judge ordered the dealer repay the couple over $9000 of the purchase price, but the dealer refused to comply with the order and appealed.Ìý

Turner says the introduction of penalties for consumer guarantee failures into Australian Consumer Law would go a long way to encouraging businesses to resolve complaints sooner.Ìý

She adds that an Ombudsman scheme, similar to those that exist for complaints in essential service sectors, could help Victoria deal with the deluge of complaints that go to VCAT every year.Ìý

“We need a better complaints system that helps people articulate and identify issues and that doesn’t put all the effort and energy on the consumer, but does it fairly, efficiently and in an accessible way,” says Turner.Ìý

“Ombuds systems are set up to do that, they are not perfect, but when you look at ombuds systems in finance, in energy, in telecommunications they offer people more support than we see through tribunals. It shows there are better ways to do this.” she adds.Ìý

The post Victorians with dodgy cars are battling a broken system appeared first on ÌÇÐÄVlog.

It’s July 2022 and Marilyn and Peter are sitting in the Cairns office of the Indigenous Consumer Assistance Network (ICAN). They’ve been waiting for this day for a long time.Ìý

It has been a year-long process of legal advice, affidavits and mechanics reports to get their case against a Cairns based used-car dealership heard at the Queensland Civil and Administrative Tribunal (QCAT).Ìý

The nervous couple have come down from just outside Wujal Wujal, four-and-a-half hours away, just for this hearing.Ìý

“We’ve been through a lot with this car,” Marilyn says. “It affected us mentally and physically a lot over this last year,”.Ìý

The couple paid a Cairns dealership $9000 for a Subaru Forester in June last year. They say the clutch broke within days and the vehicle didn’t even make it home. It now sits broken-down out the back of ICAN’s office.Ìý

Peter says he wishes he had never bought the car.Ìý

“I’m a bit illiterate. I never read the contract properly, I struggle with that, but I made the mistake when I bought that car,” he says.

A daunting experience

In the first part of this series, we travelled to the remote Cape York community of Wujal Wujal to investigate reports of dodgy cars being sold to Indigenous community members there.

Jillian Williams, operations manager from ICAN, says that in most of the cases of people affected by dodgy car sales people don’t seek redress. Peter and Marilyn are a rare case, having chosen to go through the long process of fighting for their consumer rights.Ìý

Williams says that while QCAT is meant to be set up in a way that is accessible for consumers, for many people from remote communities, the process of seeking compensation or other forms of redress can be a daunting experience.Ìý

“QCAT is not accessible when it comes to claims for faulty vehicles, it’s costly, intimidating and technical in terms of what’s required to enforce your legal rights,” she says.Ìý

As well as waiting up to a year and sometimes longer, those taking a case to QCAT are required to provide their own independent mechanic’s reports, which can cost thousands of dollars.Ìý

Melanie Wilson, acting supervising solicitor at the Cairns Community Legal Centre, says assisting remote Indigenous clients with their QCAT applications is a big task.Ìý

“QCAT is great in theory and for what it is meant to represent, an avenue to justice for unrepresented people. But the reality is that, with the evidence needed to establish a successful claim at QCAT, a lot of people do need legal help to access it or their applications to QCAT struggle,” she says.Ìý

Around the countryÌý

As we explored in the previous article, the issue of dodgy and exploitative car sales to remote Indigenous communities is not limited to Far North Queensland, and neither is the issue of accessing redress.Ìý

Sarah Black is the deputy managing lawyer at the North Australian Aboriginal Justice Agency, which works throughout the Northern Territory. She says the Northern Territory Civil and Administrative Tribunal (NTCAT) is only effective to a point, because while they can make orders about money that might be owed to consumers, “If a respondent isn’t minded to actually follow the orders of the NTCAT, then it becomes a pretty costly and cumbersome exercise to try and get those orders enforced through the local court through garnishee orders.”

Carolyn Cartwright from MoneyMob works throughout the remote APY Lands in South Australia and says many car sales there are done without paperwork, which makes seeking a remedy for a lemon car an impossible task.Ìý

Won’t pay the refundÌý

Back in Cairns, Marilyn and Peter are excited. They won their QCAT case with the adjudicator ordering them to return the car to the dealership and for the dealer to repay over $9000 to the couple to cover the purchase cost and repairs they paid for.Ìý

But their elation quickly fades when the dealer tells them they won’t accept the vehicle back and won’t pay the refund as they believe the judge should have ordered a repair instead and they plan on appealing the decision.Ìý

The fact that a dealer is able to ignore a QCAT ruling highlights problems with the system and the struggle consumers have, even when sellers are found to have breached Australian Consumer Law.Ìý

Dealership respondsÌý

A spokesperson for the dealership confirmed to ÌÇÐÄVlog that they would not be repaying Peter and Marilyn and that they intend to appeal the decision within the statutory time period.Ìý

The spokesperson said they had provided all the correct information and evidence to QCAT, that they had done nothing wrong, and added that the judge had treated them “very unfairly” in the ruling.Ìý

“Maybe because they are Aboriginal native people the judge gave them the favour in this case,” the spokesperson says. “It doesn’t matter if you are Aboriginal Torres Strait Islander or not, you should all have the same rights.”Ìý

The spokesperson added that they had supplied a mechanic’s roadworthy certificate and other documentation to the court which proved the vehicle was in working condition when it was sold to Peter and Marilyn.Ìý

Action neededÌý

Williams from ICAN says that more action needs to be taken against the small number of car dealers in Cairns that they see repeatedly breaching Australian Consumer Law and customer guarantees.Ìý

“Dealers need to be made aware that they can’t get away with breaching Australian consumer law. Regular and hard, firm action by the Office of Fair Trading against dealerships that are breaching the laws is necessary,” she says.Ìý

Similarly, Wilson at the Cairns Community Legal Centre says they have filed a high number of complaints against a handful of Cairns dealerships to the Office of Fair Trading, but little action has been taken against them.Ìý

The Queensland Office of Fair Trading (OFT) told ÌÇÐÄVlog that in the last five years they had received approximately 155 complaints about car sales in the Cairns region. The complaints included consumer guarantee issues, warranty matters, contractual matters, representations and trade-ins. They added that the motor vehicle industry remained one of the most complained-about industries across the state every year.Ìý

When asked about what action had been taken against dealers found to consistently breach the law, the OFT said 17 enforcement actions had been taken in the last five years in the Cairns region, including four infringement notices, three administrative disciplinary actions and three prosecutions.Ìý

The office did not directly respond to questions about whether dealerships who regularly breached the law should lose their license to trade, saying it was an issue for the local courts.Ìý

“The OFT takes allegations of breaches of consumer laws seriously. All complaints received are assessed and if possible breach of the legislation we administer for which enforcement action can be taken is detected, the matter is investigated,” they say.Ìý

“Where sufficient evidence is available to prove a breach of legislation for which enforcement action can be taken, the OFT will progress the matter under its compliance and enforcement framework. Prosecution action for most motor dealer breaches fall within the jurisdiction of the Magistrates Court. The penalties issued by the court are a decision for the court. Penalties can impact a dealer’s license,” they add.

Impacting everyone

The issue of a lack of redress for lemon car sales nationally impacts all communities in Australia. Queensland introduced lemon car laws in 2019, but advocates say these don’t go far enough.Ìý

In Melbourne, the Consumer Action Law Centre (CALC) says approximately 25–30 percent of all calls to their legal advice lines about consumer guarantees relate to defective cars.Ìý

Meanwhile, the state enforcement body, Consumer Affairs Victoria, receives more than 3000 vehicle consumer guarantee complaints a year.

ÌÇÐÄVlog conducted a survey of over 1000 people in June 2022*. It found that of those who had bought a second-hand vehicle from a dealership in the last five years and had a minor or a major fault, 37 percent didn’t involve the dealership with a repair or replacement.Ìý

Only 23 percent had the dealership arrange a repair or replacement at no cost to them, while 16 percent got a repair or replacement from the dealer at a cost to them.Ìý

In 11 percent of cases the dealer refused to arrange a repair or replacement.Ìý

Williams says that while the issue affects everyone, the remoteness of some Indigenous communities, as well as other vulnerabilities, increases the power imbalance between buyers and dealers and also puts up even more barriers to accessing consumer rights and redress.Ìý

A better system needed

Brigette Rose is a senior policy officer with CALC who has been working extensively on the issue of lemon cars.Ìý

The organisation has been calling for the state government of Victoria to establish a motor vehicle ombudsman to handle disputes between dealers and consumers, saying the current VCAT system isn’t working for vulnerable people. No state or territory currently has a motor vehicle ombudsman scheme.ÌýÌý

As well as waiting up to two years for a resolution, Rose says VCAT applicants have to pay at times up to $2000 for independent mechanical assessments of vehicles, which is unaffordable to many.Ìý

“It can be a really difficult system to navigate, particularly if you are experiencing any sort of vulnerability,” she says.Ìý

She thinks that an industry-funded Ombudsman scheme with the power to make binding decisions, similar to those seen in other essential service industries such as electricity and water, would provide consumers with an accessible path to justice.Ìý

“For our First Nations clients sold lemon cars, as well as for our non-First Nations clients, not being able to access justice has such a big impact on their lives, from their independence to their mental health, especially on such a big purchase,” she says.

Consumer Guarantee penalties

Dean Price, senior campaigns and policy advisor at ÌÇÐÄVlog, said another thing that could help the situation would be for the federal government to legislate stronger penalties for when businesses fail to follow the consumer guarantee provisions of the Australian Consumer Law, something which is already being considered by the government.Ìý

“When you buy a second-hand car from a dealership, it should be safe to drive. A dealership still has legal obligations to ensure that the car they are selling is fit for purpose, and they must repair, replace or give you a refund if the car they sold you has a major fault. The cost of selling faulty goods must be paid for by dodgy dealerships and not fall on the victim of exploitative practices,” he says.Ìý

“Dealerships shouldn’t be able to get away with denying people their consumer rights simply because they believe they won’t get punished or penalised. Without penalties for breaching the consumer guarantee provisions of the ACL, dodgy dealerships will continue to exploit this weakness in the ACL and people will continue to pay the price,”.Ìý

The long wait

Back in Cairns, Marilyn and Peter are packing up their things and preparing to make the long trip back to Wujal Wujal.Ìý

They arranged a tow truck to drop the car back to the dealership, but don’t know if or when they will see their refund as ordered by QCAT.Ìý

They are both dejected and resigned to the fact that the long-running saga is far from over.Ìý

“We got to keep fighting I guess,” Peter says with a sigh.Ìý

Read the first part of the investigation.Ìý

The post Car sales in remote Indigenous communities, part two: A broken system appeared first on ÌÇÐÄVlog.

Cedric Friday says that every time he looks at his broken-down Holden Captiva it makes him angry. The second-hand car that he and his brother-in-law spent $19,000 on sits immovable in his driveway.

“It didn’t last long, just four or five months, got buggered up,” he says.Ìý “I feel ripped off, I don’t know what to do with this car here now.”

Cedric, along with about 400 Indigenous people, live in the remote town of Wujal Wujal in Far North Queensland’s Cape York region, some four and half hours north of Cairns. When his brother-in-law got a large payment for historic stolen wages from the Queensland government, like many from the community here, he travelled to Cairns to buy a car from a used car dealer.

“They probably saw how much money he had and knew they could rip us off,” says Cedric. “When you buy a good car it should last you at least five years, it didn’t happen with this car.”

Cedric tried to get the dealership to pay for the repairs of the vehicle, but the company said he had to pay to tow it to an authorised mechanic first, which he didn’t have the hundreds of dollars needed to do. Now the dealership says too much time has elapsed and the vehicle is out of warranty.

Cars essential in remote communities

In remote communities like Wujal Wujal cars are essential. There is no public transport here and cars are needed for all tasks such as grocery shopping in the next town or getting around the community.

Seventy-year-old Leila Creek used her car to come to the community arts centre every day to paint and earn an income for herself. Since her vehicle broke down, she sometimes gets a lift into the centre, at other times she makes the one-hour journey on foot.

“I like walking, it’s good exercise,” she tells ÌÇÐÄVlog, with a laugh, while sitting out at the back of the arts centre.

She says the money she spent on her second-hand car was a lot for her, and she worries about getting another car in case it has problems as well.

Community-wide problem

Everyone ÌÇÐÄVlog spoke to in Wujal Wujal knows someone who has had an issue with a used car dealership in Cairns. William Harrigan is a cultural adviser for the local council and says the car issues faced by the community here are widespread.

“Absolutely the Cairns car dealerships are taking advantage of people,” he says. “They know when the Aboriginal or Torres Strait Islanders get their big money – they are out there in force to promote these cars.

“You really need cars up here and some of the cars they buy are old wrecks. The dealers paint them up and spruce it up a bit to make it look good, and the people who buy it don’t do a proper inspection.”

The impact of the issue means that customers like Florence Grace Williams end up driving vehicles they don’t feel safe in.

She bought an $18,000 Holden from a Cairns dealership. They agreed to some initial repairs when she first had issues with the vehicle just months after the sale, but they’ve refused to make further repairs and she’s spent more than $4000 repairing the car herself.

It still makes a disturbing clicking noise when she drives it.

“I don’t feel safe driving it, but I have no choice, I have to come to work driving my car, and I’ve got domestic assistance jobs driving to see clients on the other side of the river,” she says.

“I’m not happy with the dealership, I had a blue with them, I told him straight, ‘you sold me a shit car’.”

Shonky car sales an issue across the region

Jillian Williams is the operations manager at the Indigenous Consumer Assistance Network, a Cairns-based financial counselling organisation that works in remote communities throughout Far North Queensland.

She says the issues seen in Wujal Wujal are repeated throughout the communities they work in that have access to regional centres such as Cairns or Townsville.

“The main issues that we see are that people are coming and purchasing from certain used car dealerships that they have usually heard about from word of mouth, and people are being sold cars that are not fit for purpose or are of very bad quality, so they will break down very quickly, within weeks and sometimes within days,” she says.

“People try to go back to the dealer and argue that, ‘My car has just broken down. Can I get a refund or can you pay for the repair?’ And the dealers almost always refuse.”

She says that leaves customers with few options other than the time-consuming and expensive process of going through the Queensland Civil and Administrative Tribunal to try to get redress (something we will explore in more detail in the second part of this investigation).

Power imbalance

Williams says there is always a power imbalance between car dealers and their customers, but that for people from remote communities, who are often under time pressure because they are only in town for a short period, that imbalance is more pronounced. Language, literacy and consumer confidence to challenge dealers can also be factors in the power imbalance.

The Cairns Community Legal Centre’s acting supervising solicitor, Melanie Wilson, says the centre has assisted a large number of Indigenous clients in disputes against a handful of Cairns car dealerships that are “repeat offenders”.

“There are some we have received more complaints about than others, and some we have had decisions against in QCAT as well,” says Wilson. “Certainly, there are some dealerships that, despite receiving multiple complaints against them, don’t seem to change their behaviour much.”

Online sales facilitate dodgy deals

The issue of low-quality car sales is one affecting remote Indigenous communities around Australia, though in different ways. ÌÇÐÄVlog spoke to financial counsellors, lawyers and advocates working in communities in the Northern Territory, in South Australia’s remote APY Lands and in Western Australia – and all of them shared stories of motor-vehicle issues facing the people they work with.

Sarah Black is the deputy managing lawyer at the North Australian Aboriginal Justice Agency, which works throughout the Northern Territory. She says car dealers are taking advantage of Aboriginal people in remote communities who have to buy cars online without first physically inspecting the vehicle.ÌýÌý

“We see really exploitative sellers that are targeting people that they know don’t have the geographical access to actually inspect the vehicle themselves and taking advantage of that geographical remoteness,” she says.

“Someone might purchase a vehicle from Adelaide through an ad they saw on the internet without them having ever seen the vehicle, and then the vehicle is freighted to Alice Springs for the person to come and collect.

“When it arrives, it’s clear that the vehicle differs greatly from the description that’s been given of it. It’s much lower quality and certainly not worth the amount of money that the customer paid. We’re often finding that the vehicle is not fit for purpose either. So when the client tries to drive the vehicle back to the remote community on an unsealed road, the vehicle can’t actually make that journey and breaks down on the way.”

‘Grey market’

In the remote APY Lands in the South Australian desert, the red dirt roads are littered with broken-down and abandoned cars. Carolyn Cartwright from MoneyMob says residents there have little choice but to buy cars from “grey market” used car dealers who are often light on paperwork and selling low-quality vehicles.

“People often don’t have paperwork for their cars and they certainly don’t have access to a refund when something goes wrong,” she says.

Meanwhile, Teena Forrest from Western Australia’s Consumer Protection says the issue of lemon cars affects Indigenous people she works with across the state.Ìý

‘We can’t go anywhere’

Back in Wujal Wujal, Michael Bamboo is sitting next to his broken-down Mitsubishi, raised on cement blocks in his driveway. A relative who is “good with cars” is hoping he can make it run again, as Michael can’t afford to get it towed the one-hour drive to Cooktown for the mechanic to look at it.

He paid about $10,000 for the car on finance and is still paying off the loan.

“It is hard to go from here to the shop to do our grocery shopping,” he says. “Hard to pick the young fella up from school or go to the beach on the weekend. We can’t go anywhere and he always wants to go somewhere.”

At the town’s local radio station, Carmel Haines is in a similar situation. Her car is stuck at the Cooktown mechanics because she can’t afford to get it repaired after it broke down within months of her buying it on finance.

“I’m still paying off the loan,” she says. “It is frustrating, just paying for something I don’t have any more.”

In part two

In the second part of this series, we look into the systems for redress when someone’s car breaks down within days of purchase, explore how they are failing consumers, and ask what could help the situation for remote Indigenous residents.

The post Remote Indigenous communities left with broken cars and no redress: Part one appeared first on ÌÇÐÄVlog.

When Tim McKenzie first bought a 2008 Holden Omega from a used car dealership in Melbourne in 2019, he was excited to have a shiny new vehicle to drive. But he didn’t get far. Within 45 minutes of leaving the car yard, the engine light came on and the car broke down.ÌýÌý

Two years on, he says the vehicle has caused him nothing but trouble.

“I don’t regret a lot in life, but I definitely regret buying a car from a company that didn’t look after me and took full advantage of a guy with a great credit rating,” he tells ÌÇÐÄVlog.

“They definitely took advantage of a guy who wasn’t a mechanic, who didn’t know a lot about cars.”

Paying $14,000 for an $8000 car?

Tim says the finance arrangement was never properly explained to him. Through an arrangement offered at the dealership in partnership with Latitude Finance, Tim ended up owing about $14,000 on a car that cost less than $8000 without the financing. (At ÌÇÐÄVlog, we gave Harvey Norman a Shonky Award in 2020 largely thanks to its relationship with Latitude Finance.)Ìý

The car broke down multiple times over the years and Tim turned to payday lenders to cover the cost of making repairs.

“After the second breakdown, I think I had $50 in my pocket at the time,” he says. “Being as I had a good credit rating, I went through same day lenders. It was quite easy to get the money, but it made me more in debt.”Ìý

Tim says he feels unsafe driving his daughter around in the car, and that the vehicle and associated debt have sent him into depression.

“I just don’t feel comfortable in the car at all, even if it’s a short drive,” he says. “You shouldn’t have to be stressed out to drive a car around, but it is always in the back of my mind.”Ìý

Why Tim is far from alone

Consumer Affairs Victoria told us it received more than 2500 enquiries and complaints related to used car sales in 2020–21.

The Consumer Action Law Centre, which has been assisting Tim, says it has received more than a dozen cases relating to Automax, the car dealership Tim bought his car from.

Automax, based in the Melbourne suburb of Dandenong, is owned by CMG Automotive, which claims to be Victoria’s largest independent car dealer.

Consumer Action CEO Gerard Brody tells ÌÇÐÄVlog that in response to all the complaints, Consumer Affairs Victoria is now investigating Automax.

“This is a particular car dealer where we have had a number of complaints from people about defects in vehicles and, really, failures of that business to respond to repair requests effectively,” says Brody.

CMG Automotive did not respond to the questions we sent.

Worthless warranties

When David Douglas bought his 2011 Peugeot RCZ for $16,000 from Automax in March 2020, he was told his purchase included a $1700 extended warranty from a company called Integrity Car Care.Ìý

But he had issues with the vehicle straight away on the drive from Melbourne back to his home in Canberra. When he got to Canberra, a mechanic quoted him almost $2000 for various repairs. His attempts to get either Automax or Integrity Car Care to pay for repairs have failed.Ìý

“I bought the car believing that I had a warranty,” he says. “That’s why I went through a dealer.”

A broken-down system

Under Australian Consumer Law, buyers of new or used cars are entitled to repairs, a replacement or a refund if there’s a major fault, and the customer gets to choose which they want.

But dealerships that don’t honour those rights leave customers like Tim and David with little hope for a remedy.ÌýÌý

Brody says the current system for resolving disputes involving motor vehicles, through the Victorian Civil and Administrative Tribunal (VCAT), isn’t working for consumers.

The burden of proof falls on the customer, Brody says, meaning they’re often required to come up with as much as $1000 for an independent assessment of the vehicle for the tribunal. He says VCAT cases can take up to two years to be resolved.

“People can tend to just give up because it’s too expensive [to go through VCAT] and either deal with a car with defects that might be dangerous, or spend more on another vehicle or go without,” he says.

Time for an ombudsman

Brody says the ombudsman-based system for handling complaints has worked extremely well for telecommunications, energy and water, and that a motor vehicle ombudsman should be set up to deal with the high volume of complaints.

“Ombudsman services are a really effective dispute body that provides quick and efficient access to justice,” he says.Ìý

“Rather than the burden being on the consumer to prove their case, the ombudsman has the expertise to investigate and overcome those proof barriers and make a determination or a resolution.”

Consumer advocates drive up pressure

Consumer Action recently partnered with Victorian Aboriginal Legal Service, WEstjustice and Hume Riverina Community Legal Service to call on the state government to introduce an ombudsman body funded by both government and industry.

Although there’s currently no motor vehicle ombudsman in any other Australian jurisdiction, Brody says the effectiveness of the ombudsman in other industries has created a model to follow.

“A motor vehicle is one of the biggest purchases a household makes, so it is sort of strange that you’ve got the access to an ombudsman service for utilities and services, but not for that big purchase like a car,” he says.

No response from Victorian government

The Victorian government hasn’t responded to consumer groups’ calls for a motor vehicle ombudsman.

We sent questions to the state minister for consumer affairs Melissa Horne, asking about the potential creation of a body and whether she thinks the current VCAT system is working well for customers with car disputes.Ìý

She didn’t respond to the questions personally. Instead, her office told us: “Consumer Affairs Victoria takes breaches of the law by motor car traders very seriously.Ìý

“In October a former licensed motor car trader was convicted and fined for deceiving consumers after court action taken by Consumer Affairs Victoria and they’ll continue to take action where wrongdoing is identified.”

‘I can’t do anything’

Tim McKenzie says he feels stuck with his lemon vehicle now and has thought about going to VCAT, but isn’t sure the time and energy will lead to a successful outcome.Ìý

In the meantime, his debts have got so bad he’s now considering filing for bankruptcy. All in all, he rues his decision ever to go to Automax in 2019.Ìý

“I wish I had my time again,” he says. “I wouldn’t have bought this car, I wouldn’t go for the same-day lenders.Ìý

“I can’t afford to go on holidays, I now have the worst credit rating, I can’t go to the bank to get a loan, I can’t do anything.”

The post Calls for car ombudsman to resolve ‘lemon’ vehicle disputes appeared first on ÌÇÐÄVlog.

On this page:

• How widespread is odometer tampering?
• How odometer tampering happens
• Consumer protection measures in Australia
• Tampering in the local market?
• Tips for second-hand car buyers

This is exactly what happened to ÌÇÐÄVlog staffer Scott O’Keefe, who recently found out he’d lost around $12,000 to a wound-back odometer.

Back in 2013, O’Keefe paid $24,999 for a second-hand van which he’s since found out was worth closer to $13,000. While the odometer reading in the van and on the contract of sale read 36,091km, he later found out through an auction report it had actually done closer to 183,203km – a winding back of about 147,000km.

There are a number of state-based laws that slap hefty fines on anyone found to have tampered with odometers, but this hasn’t helped O’Keefe get his money back.

How widespread is odometer tampering?

CarHistory.com.au told us that 4172 odometer wind-backs had been discovered through its reports in the four years between 2013 and 2016. And in the first two months of this year alone,Ìý776Ìýinstances of odometer tampering were uncovered. However, the NRMA told us its understanding is that odometer fraud is at a very low level in Australia. If caught, fines can be high, “so any increased value arising from odometer tampering would have to be substantial to be worth the risk”, an NRMA spokesperson says.

O’Keefe bought an imported second-hand van from Japan through a dealer, just like thousands of other Australians do each year. While imports of second-hand vehicles into Australia are currently heavily restricted, certain types of vehicles can be imported through the Specialist and Enthusiast Vehicle Scheme (SEVS), provided it comes through an accredited compliance workshop, or Registered Automotive Workshop (RAW).

From 2018, consumers will be able to personally import vehicles from overseas provided they are no more than 12 months old and have less than 500kms on the odometer. This will likely increase the number of cars imported from Japan on Australian roads. The move should introduce some healthy competition to the car market, but without the correct consumer protection measures in place to combat odometer fraud, it could also mean more consumers buying duds.ÌýBroadly speaking, ÌÇÐÄVlog is supportive of the proposed changes to importation laws, provided that consumer protection and safety are considered as part of this process.Ìý

Second-hand Japanese car imports a target

While odometer fraud in the local market can and does occur, imported cars – particularly those from Japan – are targets for tampering. With a total of 5756 vehicles and motorcycles imported through the SEVS scheme in 2014–15, the vast majority of imported second-hand cars came from Japan, according to the Department of Infrastructure and Regional Development (DIRD). Exactly how many of these imported cars have their odometers tampered with is unknown, but Ben Lippa, who imports used vehicles from Japan through his business J-Spec Imports, says it’s a huge problem in the industry. While many second-hand car importers will do the right thing, he believes that at worst, 70–80% of cars coming into Australia from Japan may have had their mileage wound back.Ìý

Odometer tampering on second-hand car imports was deemed enough of a problem that the NSW Department of Fair Trading and the NSW Police conducted a two-year investigation, which culminated in four Sydney car dealerships being stung earlier this year.

How odometer tampering happens

The car doesn’t exist on Australian books until it’s registered, says Lippa, which leaves a regulatory gap between when the car is bought at an auction in Japan and when it’s sold by a dealer in Australia in which the odometer could be tampered with.

Once the car arrives in Australia it goes through Customs, which doesn’t collect any information on the odometer reading. Before it can be registered for use in Australia, the car goes to a compliance workshop to be checked to ensure it meets Australian safety standards. In order for the car to be registered, the workshop must document the odometer reading on a document known as a consumer information notice (CIN). While the DIRD can cross-check the odometer reading on the CIN with that contained on the Japanese deregistration certificate (a document which is required to be kept on file by the workshop for 10 years), “there is no requirement that the odometer reading accurately reflects the vehicle’s history”, a departmental spokesperson tells us. Odometers aren’t regulated by the DIRD, and while it may seem strange, it’s because there isn’t actually a requirement that a car even have an odometer.

What we can learn from New Zealand

Australia is by no means the first country to face the problem of odometer fraud. A substantial proportion of second-hand Japanese imports into New Zealand had their odometers tampered with after it relaxed its import laws in the mid-1980s. While this had the positive flow-on effect for consumers of reducing the cost of second-hand vehicles, estimates on the incidence of odometer tampering on imported vehicles from Japan ranged from 10 to 70%.

To combat this, the Kiwis passed legislation which included a requirement that all used vehicles display a Consumer Information Notice, which shows the vehicle’s odometer reading. If the seller can’t vouch for its accuracy, then they must also make a statement saying it’s either not possible to determine or that the odometer reading is inaccurate. In addition to this piece of legislation, imported used cars in New Zealand have their odometers checked by Customs and are barred entry if they’re found to have fraudulent or missing odometers.

New Zealand’s Motor Vehicle Register also keeps records on odometer readings and whether or not the vehicle has been imported, which prospective buyers can request through the NZ Transport Agency.

Consumer protection measures in Australia

In the time since O’Keefe bought his vehicle in 2013, there have been changes that go some way to preventing dodgy sales – at least for consumers in NSW. Dealers in NSW selling a second-hand car must now specify on a prescribed form whether or not “the dealer reasonably suspects that this vehicle has had its odometer altered”. Without this provision, O’Keefe’s dealer could claim ignorance, saying he didn’t know the odometer had been tampered with. We’d suggest being highly suspicious of any dealer that can’t vouch for the accuracy of the odometer reading and doing your own investigations as to its accuracy.

A motor dealer’s fund providing compensation for losses incurred through a motor dealer’s wrongdoing has also been set up in NSW (and many other states) since O’Keefe bought his vehicle. In NSW, for example, up to $40,000 for losses incurred can be granted as a result of the dealer failing to comply with a requirement of the Motor Dealers and Repairers Act 2013. While this sounds like solid protection, it’s hard to know just how useful that provision is without proof that the dealer you bought it from tampered with the odometer. And without catching someone in the act, it’s difficult to prove exactly who did the tampering, or that it happened on a dealer’s watch. The Victorian compensation fund has a similar requirement, but again your case could be difficult to prove.

ÌÇÐÄVlog has written to the Minister for Infrastructure and Transport, Darren Chester, asking that additional consumer protection measures be introduced prior to the relaxation of rules on foreign car imports in 2018. We’ve asked the federal government to require all cars imported from Japan to undergo a mandatory pre-shipment inspection, confirming the odometer reading at the time of export. We’re also asking that these figures be cross-checked with the odometer reading on the car when it goes through the mandatory safety inspections in Australia, and that information on these checks be provided to consumers at the point of purchase.

Tampering in the local market?

So what if you’re buying a non-imported second-hand car? Finding out if your vehicle has been tampered with isn’t exactly easy. While odometer readings are taken when cars are bought and sold (and in NSW also at each registration inspection), this information isn’t publicly available. A government (formerly a REVS check) will provide information on whether the car has been stolen or has money owing on it, but odometer reading checks aren’t provided with this – although it’s still worth doing a PPSR check. Some third parties providers such as CarHistory.com.au, CarFacts.com.au and revscheck.com.au provide paid reports, which are based on historical ad data as well as government and insurer data. These can give you an indication of whether or not your car has been tampered with since it was last advertised for sale.

Tips for second-hand car buyers

O’Keefe’s story serves as a cautionary tale. When it comes to second-hand cars, do your due diligence before you buy rather than relying on any provisions that may protect you after the fact.

• Have the vehicle inspected by a third-party, licensed motor vehicle repairer. This can uncover any inconsistencies with the condition of the vehicle in relation to the odometer reading. For example, if the seats are worn, but the mileage is low, it could indicate tampering.
• Check the log book history to make sure the odometer readings match up. If you’re unsure, you can contact the dealer/repairer and ask them to check their records.
• If you’re buying a second-hand import from Japan, make sure you sight the original Japanese export certificate (or deregistration certificate), or obtain a copy through a third party. This will contain the two most recent odometer readings taken in Japan at roadworthiness checks, which are required every two years.
• You may wish to purchase an odometer check report through a third party as an extra precaution.Ìý

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