Discussion Paper: Review of the Consumer Information Standards (Used Motor Vehicles) Regulations 2003

May 2006

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5. The 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.

These requirements, and whether there are general improvements that could be made to the form as a whole, are the focus of this chapter. In considering the forms of the SIN it is important to take into consideration the guiding principles as discussed in chapter 3, that the context and format need to be:

• easy to understand
• limited to key information
• suitable for the medium through which it is provided
• consistent across the market so consumers become more familiar with it and it is easy to enforce
• provided at minimum compliance costs.

Supplier Sale and Vehicle Details

The SIN seller and standard vehicle information requirements have been variously described as too rigid, inconsistent and confusing in their use of yes/no entries (or the requirement to leave a blank space). Further confusion arises where there are also associated date entry requirements. Particular sections of the form have already been highlighted in the earlier discussion where adjustments are needed to make sure the information is conveyed clearly.

Clearly, the information could be provided in many ways. These range from no prescribed format to the fully prescribed format of the current regime. Some of the options are identified and explored below to help you develop your submissions in this area.

No Prescribed Format

Under this option, the regulations would establish what information must be provided but would allow the supplier to decide how to present that information.

The advantage of this option is that it allows suppliers free reign to do what they do best, i.e. competitively market the information. A disadvantage is that there would be no consistency across the market in the placement or prominence of the items of information making comparisons more difficult. Another is that enforcing the regulations would be more resource intensive - a burden on the taxpayer.

Broadly Stated Format Requirements

The format could be expressed in general terms, while allowing some freedom for innovation by suppliers. For example, the regulations could require that certain information be grouped together (such as price relevant information, registration details, supplier details), as well as set limits on the amount of space permitted for additional information.

This approach would ensure some consistency in the arrangement of the information. The benefits conferred by consistency in format, both for consumer familiarity and ease of enforcement, would depend on the extent to which the grouping of information was prescribed.

Totally Prescribed Format

The purpose of the current prescribed approach is for the SIN to be seen clearly as an informational tool. Any marketing information must be provided as separate material. The regulations state what information is required and how that information should be presented.

This approach ensures consumers receive information that looks exactly the same across the market, which makes comparing SINs straightforward. It is also the most easily enforced. A disadvantage of this approach is that it is difficult to respond rapidly if there are changes in the market, in legislation or in information needs. It also assumes all consumers will interpret the information in the same way when it is provided in a particular format. The various interpretations of what a blank space means in the current format show this assumption cannot be relied upon.

A Mixed Format Approach

This approach could require that certain prescribed information be presented in a particular way and/or in a particular placement, for example, that a statement indicating whether or not there is a registered security interest must be placed in a box immediately below the description of the vehicle). It could also stipulate information is grouped in a certain way, but allow the supplier some flexibility in the manner the information is presented.

This option has similar benefits to the fully prescriptive option without its rigidity. Notices would not look exactly the same but should have enough similarity in the most critical areas to make sure comparative information is provided to consumers. As a guide, the critical items of information should be those which, if not disclosed or if misrepresented, directly impact on the value of the consumer's purchase, would have significantly influenced the decision to purchase, or would negatively affect the their right to redress.

Online Security

The display of the SIN online is currently required by section 14 of the MVSA. While access to vehicle and ownership information contained in the SIN is currently also 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. Such an approach may also limit the means by which such activity can be detected and traced.

Consideration must be given to how the provision of SIN information online may affect the consumer's online safety.

Consumer Advice

Buying a vehicle is a major purchase, so it is important for buyers to know their rights and obligations. Providing too much information, however, can defeat the purpose for which that information is provided. As noted earlier, there is concern within the industry and from consumer groups that the consumer advice displayed on the SIN creates confusion rather than informing consumers of their rights.

The manner in which consumer advice is provided on the SIN needs to strike a balance between informing consumers and overloading consumers with information. The form should accommodate those consumers who would like to be aware of their rights and responsibilities from the start and those consumers who just want to know where and how to seek advice if needed.

Consideration could be given to the following options to improve the effectiveness of the SIN as an informational tool.

Reducing the Amount of Generic Advice

It might be possible to reduce the amount of generic advice provided by replacing the current detailed information with a simple statement and contact point where more information can be found. Traders, if they wished, could also provide contact details for any industry-based information or disputes resolution avenue.

Limiting Information to Key Messages

Consumer research shows that five to seven key messages are the maximum number for information comprehension and retention. The critical key messages would need to be determined on the basis of their having (or their omission or misrepresentation having) a significant impact on either the decision to purchase or the ability to seek and gain redress.

Providing Generic Advice Supplementary to SIN

Suppliers could be asked to provide some form of generic advice in another form, so that only vehicle advice is provided on the back of the SIN. The requirement could be based on a flyer developed and made available by the Ministry or, alternatively, an industry association or web page.

These options are clearly not exhaustive and your submissions on how to improve the effectiveness of the SIN would be welcome.

Other

Signing and Dating the SIN

The SIN must contain a space for the buyer to sign and date, acknowledging they have received a copy of the SIN.

No need to change this requirement has been identified. Consideration could be given to requiring both parties to the sale to sign. 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.

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. This can be confusing for buyers.

This confusion is compounded by reference to both "you" as the supplier, and "you" as the buyer on the vehicle details page. Both of these issues need to be addressed.

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