Recommended Changes to the Consumer Information Standards (Used Motor Vehicles) Regulations 2003: Discussion Paper

March 2007

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3. Supplier Information Notice Form in Which Information Is Provided

Section 7 of the Consumer Information Standards (Used Motor Vehicle) Regulations states that the SIN must be in the form set out in Schedule 1 and contain within it the information required by Schedule 2.

For used motor vehicles displayed at a physical location, the SIN must be printed on white paper, card or similar material that is at least 21 cm in width and 29.5 cm in length. It must be in a font size that is easily readable by a person at a reasonable distance.

Where the vehicle is offered or displayed for sale on the internet and a contract for sale may be entered for that vehicle on the internet, the SIN relating to that vehicle (or access to it) must be clearly and prominently displayed on the same web page as the offer or display for sale and its contract for sale.

A. Supplier Sale and Vehicle Details

The May 2006 discussion paper sought feedback on the best approach to providing consumers with specific sale and vehicle information. It asked for feedback on any specific problems with using SIN for internet, car fair or display for sale sales; what items of information should be fully prescribed; and what, if any, items of information should be presented in a manner of the supplier's own choosing.

Trade associations, consumer representatives and the Commerce Commission all agreed that the prescribed format is the appropriate means to provide consumers with specific sale and vehicle information. It was suggested that like information should be grouped together and that information should be stated explicitly rather than allowing for any blank fields. It was also noted that the element of standardisation was likely to assist potential buyers and the standard layout makes enforcement easier.

With regard to the question of specific problems with any particular approach in the terms of medium through which the vehicle is offered for sale, the trade associations suggested sales conducted through the internet were often initiated and concluded without the disclosure or provision of the SIN.

The Ministry of Consumer Affairs agrees that this means of sale has been problematic regarding the requirement for car market operators to take reasonable steps to ensure private consumers using car markets display the SIN. As discussed under section 2A Supplier's name and address and contact information, the Ministry has proposed amending the MVSA requirement for car market operators to take reasonable steps to ensure all sellers using car markets display a SIN and instead to require only traders selling through car markets to display the SIN. This is discussed more fully in Appendix Two.

Online Security of Information Concerns

The display of the SIN is currently required by section 14 of the MVSA. While access to vehicle and ownership information contained in the SIN is currently available by other means, providing the information freely online potentially increases the opportunity for crimes such as identify theft and fraud relating to motor vehicles.

The issue is that increasing the amount of personal information available about a person online increases the potential risk of identity theft and other fraudulent activity.

This risk is potentially increased when the SIN information is free, nicely bundled together and put into an online environment, where it is increasingly difficult to police fraudulent behaviour.

The strong concern described by Trade Me auction website is that by requiring them and other internet sites to take reasonable steps to ensure the display the SIN they may actually contribute to instances of identity theft.

It is possible that in enforcing SIN display requirements, would-be sellers (either consumers or motor vehicle traders) will be deterred by this requirement, making the online forum for car sales less appealing.

Comment

The Ministry of Consumer Affairs considers that the availability of the information on the SIN is very important for the consumer's assessment of the vehicle they are considering purchasing particularly so when buying from motor vehicle traders who are accountable to a higher standard or service than a private seller. This is a sufficient enough need to continue to require this information to be displayed online by motor vehicle traders over concerns about possible information security concerns.

Internationally, it is recognised these risks are inherent within the internet and users are making better use of the security systems that are developing. The recommendation to remove the requirement for private sellers to display a SIN when using a car market will further reduce the potential occurrence of fraudulent activity being conducted towards private individuals.

Given the nature of the SIN it may be more difficult for fraudsters to perpetuate internet crime using the details of a motor vehicle trader rather than using those of an individual.

B. Consumer Advice

The May 2006 discussion paper sought feedback on what general consumer information should be disclosed on the SIN, what level of detail should be disclosed, where should buyers be told to go to seek further advice, what should be the layout of consumer protection information and what is the single most important contact from which buyers can/should get assistance? Three options were presented -

• Reducing the amount of generic advice
• Limiting information to key messages
• Providing generic advice supplementary to SIN

The options discussed above received little comment from submitters other than the trade associations. They commented that the information currently provided is acceptable given the space available but considered it could be abbreviated to make the points covered more salient.

The trade associations also pointed out that the reverse of the SIN suggests that a security interest must be disclosed if one exists. The Ministry of Consumer Affairs agrees this is not technically correct and recommends this section of the SIN be amended to reflect the consequences of the motor vehicle trader choosing to provide this information.

Another suggestion was the reverse of the SIN should suggest to the consumer to first take any concerns regarding the vehicle purchase to the motor vehicle trader who sold it to them.

The Ministry notes the Review of the Operation of the Motor Vehicle Sales Act highlighted the email address of the Personal Property Securities Register will no longer be used and recommends this be reflected on the SIN.

C. Other

Signing and Dating the SIN

The SIN requires the buyer to sign and date that they have received a copy of the SIN. The 2006 discussion document noted that the Ministry of Consumer Affairs has not identified a need to change this requirement. It was suggested, however, that consideration could be given to requiring both parties to the sale to sign the SIN. The Ministry noted that if the information is provided in written and signed form, the buyer has some record of the transaction and any claims made and is in a stronger position to seek redress if there are disputes about the transaction.

There was strong agreement from submitters that the requirement for the buyer to sign and date that they have received a copy of the SIN be retained. The trade associations also agreed with the suggestion that both parties should be required to sign the SIN.

The Ministry considers that by having the consumer sign the SIN, the consumer, if not already aware of the SIN, has the core information about the vehicle and rights of redress firmly drawn to their attention. The same would apply if the motor vehicle trader was also required to sign the SIN. Such an action also will focus the trader's attention to the requirement that they must provide the SIN to the consumer.

Notice Title

The purpose of the SIN is to provide individual vehicle details to consumers as well as general consumer protection advice about buying a used vehicle. The legislative instrument is called a Consumer Information Standard. However the notice itself is called the Supplier Information Notice. In the May 2006 discussion paper, the Ministry of Consumer Affairs suggested this can be confusing for buyers as they can be unsure as to what information is being directed at them. It was also noted that this confusion is compounded by reference to both "you" as the supplier, and "you" as the buyer on the vehicle details page.

Feedback was sought on whether "Supplier Information Notice" is a suitable title for the form.

There is support from the submissions for a name change. The trade associations and Consumers Institute supported a name change to "Consumer Information Notice". The Ministry agrees that this name would appear to be a suitable choice. By appearing more consistent in name with the Consumer Information Standard the confusion that can exist will be removed. The name change also will immediately alert the consumer that the information is intended for them.

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