Issue Date:  -  Monday, 3 July 2000

Motor Vehicle Traders warned no insurance forcing

The Ministry of Fair Trading has issued a reminder to Motor vehicle dealers that it is illegal to force a customer to buy optional insurances.

“Under the Consumer Credit Code, a loan for goods may require that the goods are insured,” Fair Trading Commissioner Patrick Walker said. “Any other insurance is optional. It is an offence to require a customer to take out optional insurance.

In recent weeks Brian Gardner Motors Pty Ltd of Cannington was fined $1000 for two counts of requiring a customer to buy optional insurances to obtain a loan for a car.

An employee of the dealer involved in the sale had been fined $500 in September 1999 after pleading guilty to two charges under the Fair Trading Act, for misrepresenting the need for consumer credit insurance and for gap cover for any insurance excess.

At the Perth Court of Petty Sessions, Magistrate Robert Burton found that the car dealer was aware that the conduct was illegal and had failed to exercise due diligence to prevent it.

“That both the employee and the dealer were prosecuted demonstrates how seriously insurance forcing is treated,” Mr Walker said.

“After the Ministry intervened, the customer’s premiums were refunded. The former employee involved cooperated with our investigation and has since left the motor industry,” Mr Walker said.

Consumers wanting further advice on this or any related matter can ring the Fair Trading Call Centre on 1300 30 40 54 or send an email to consumer@docep.wa.gov.au.

Media inquiries:

Hayley Mayne
Tel: (08) 9282 0961
Mobile: 0409 118 982