July 16, 2016

Owning a car is becoming easy with more second-hand dealers setting up showrooms and with financial institutions opening up their doors making credit accessibility easier. Many consumers are making the most of it by investing into a used vehicle. All looks so good until getting a first breakdown few days or weeks after the purchase.

According to the Land Transport Authority of Fiji, four complaints are received per week by consumers regarding defects in their newly-purchased second-hand vehicles. At a recent stakeholders meeting spearheaded by LTA, it was revealed that Fiji has become a dumping ground for low cost substandard vehicle imports.

There are many safety concerns regarding second-hand vehicles which do not comply with the structural standards. Also, vehicles imported from Japan may have radiological contamination which can have adverse health impacts in the long term. LTA highlighted that sometimes Fijian consumers end up buying stolen vehicles or flood-stricken vehicles unknowingly.

The Council also continues to receive complaints against some second-hand vehicle-dealers over defective vehicles. Since 2011 to date, 132 complaints have been received, which are worth $1.3 million. These complaints reflect consumers being misled with tampered odometer, deceptive sales practices, lack of pre-disclosures at point-of-sale; misrepresentation/misleading information; sale of defective/faulty vehicles; delay in deliver of vehicle; no provision of spare parts or back-up services; warranty issues; vehicle parts changed after deal is made; poor after sales service, unfair financing arrangements, , junk and unsafe vehicles with cosmetic treatment, improper and cheap mechanical work and many other issues.

Odometer tampering/fraud is also seen as a major area of concern, misleading the buyer by falsely showing a lower mileage than the actual mileage of a vehicle. In most cases, the tampering of odometers are done to make the vehicles more attractive to buyers and to inflate the value of vehicles so that they can be sold at a higher price.

Here‘s a case study to show the extent of deception a consumer can face when owning a used-vehicle:

A complaint was lodged by Jacob with the Council in April this year against a second-hand vehicle dealer in regard to the incorrect mileage given to him before the purchase of a Silver Toyota Prius for a sum of $23,500. He paid additional $2,039.45 including $500 deposit upfront during the process. Jacob is seeking a refund of $25,539.45 as final settlement.

According to Jacob, during the examination of the vehicle, there was a paper inside the vehicle which stated the mileage of 21,700 kms. However, during the test drive, he noticed that the odometer appeared to be switched off. Upon enquiry with the salesperson, Jacob was shown the mileage of 21,700 kms written on the paper. Based on the mileage, he agreed to purchase the vehicle. He was then provided a quotation for the vehicle which stated that the mileage of the vehicle was 21,700 kms. Based on the quotation he obtained loan from the bank to buy the vehicle.

However, when the vehicle was delivered, the odometer gave a reading of 100,196 kms. This was almost 5 times more than what was stated before the purchase of the vehicle.   The Council wrote to the vehicle –dealer reiterating that they had misled Jacob as he had relied on the quotation provided to him prior to purchase of the vehicle. The dealer admits the error but is pushing the blame to the bank for not conducting further search. As far as the Council is concerned, it is an offence under Section 75(1) of the Fiji Commerce Commission Decree 2010. 

(According to Section 75 – (1) A person shall not, in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive.)

A trader must not omit or hide any information about the motor vehicle that could adversely affect the decision of the consumer. In other words, a trader must not make false or misleading representation.

As per Section 77- (1) A person shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services –

(a) falsely represent that goods are of a particular standard, quality, grade, composition; style or model or have had a particular history or particular previous use which they do not have

This is just one among many such cases of deception faced by the ordinary consumers when dealing with some second-hand dealers.

The Council has been pushing for the reintroduction of offshore inspection by Japan Export Vehicle Inspection Centre (JEVIC), which is an independent pre-shipment vehicle inspection agency.

A pre-shipment vehicle inspection program is proven effective in ensuring safety, biosecurity and consumer protection as they look out for emissions testing; structural and safety checks (accident damage, flood); biosecurity verification (harmful pests); fraudulent representation (stolen vehicle) and accurate documentation.

The good news is that all used-vehicles imported from Japan for use on the roads in Fiji, will have to be inspected by JEVIC, starting from mid-August this year. The inspection fee will be FJ $169 VEP. Though, this may mean extra dollars payable by the Fijian consumers but it is worth the money!