Overall Summary of MVSA Review Findings | Review of the Operation of the Motor Vehicle Sales Act 2003: Report Presented to the House of Representatives Pursuant to Section 163 of the Motor Vehicle Sales Act 2003

Review of the Operation of the Motor Vehicle Sales Act 2003

Review of the Operation of the Motor Vehicle Sales Act 2003: Report Presented to the House of Representatives Pursuant to Section 163 of the Motor Vehicle Sales Act 2003

Overall Summary of MVSA Review Findings

Registration

338. The administrative systems for registration are in place and the Motor Vehicle Traders Register (MVTR) is working well.

339. Activity by the Motor Vehicle Traders Registrar with regard to both registration and the information disclosure requirements over the first two years has been primarily directed towards education and voluntary compliance. However, in the last six months a more enforcement oriented approach has been signalled.

340. Registration numbers have exceeded 2003 estimates which indicates a relatively high level of compliance, although there continues to be some concern from both industry and consumers that there are traders who are continuing to operate outside the system.

341. There is general concern that levels of compliance continue to be poor with regard to internet trading and through car fair operations and it will be critical to the effectiveness of the overall regime in the longer term that enforcement effort is directed towards those less visible in the retail market and, in particular, towards transactions conducted through car fair operators, and over the internet.

342. Between the Registrar, National Enforcement Unit, Commerce Commission and the Motor Vehicle Disputes Tribunal a considerable amount of information is collected about trading activity and behaviour and increased communication between these agencies could assist in identifying priority enforcement targets. Regular networking and information sharing between the agencies could also help to build an evidence base for applications to the District Court to ban a person from motor vehicle trading.

Information Disclosure

343. An early and comprehensive review of the Consumer Information Standards (Used Motor Vehicles) Regulations 2003 and the Supplier Information Notice (SIN) is recommended and is underway. While the concept of the SIN is sound, there are concerns that the SIN attempts too much, and in doing so, negates its effectiveness as an information resource. Proposals to address the concerns raised need to be more fully developed and consulted widely with both industry and consumer interests.

344. Consideration needs to be given to amending section 14 of the MVSA to clarify the responsibilities placed on car market operators with regard to providing the SIN, in particular in relation to internet sales. Further consideration should be given to removing the requirement only to take reasonable steps to ensure that a consumer selling a vehicle through a car market operator provides a SIN, thereby strengthening car market operators responsibility in the area.

Disputes Resolution

345. As noted above, there needs to be more information disseminated about the role of the MVDT and how it works.

346. The MVDT could take a more proactive approach in dealing with traders who attempt to flout the hearing process.

347. A record needs to be kept of those traders that contravene an order of the MVDT so that the powers of section 68(b) of the MVSA, banning such traders from holding a licence, can be invoked.

348. Allowing the MVDT to consider financial arrangements under the Credit Contracts and Consumer Finance Act 2003 (CCCFA) would improve outcomes for consumers.

349. The removal of the Motor Vehicle Dealers Fidelity Guarantee Fund has denied some consumers a full remedy. For others, the wider application of the MVDT to enable access to redress under the Consumer Guarantees Act has brought better remedies. It will be important to continue to monitor trader behaviour in this area and for government agencies to develop robust information sharing arrangements.

General

350. The level of consumer awareness of their rights needs to be strengthened across all aspects of the motor vehicle sales regulatory regime.

351. The number of agencies involved in administering and enforcing various aspects of the regime is confusing for consumers and may provide a barrier to consumers seeking remedies that are available to them, or from passing on information about unethical traders.

352. One possible approach to improve consumer awareness could be the creation of a central consumer enquiry centre.

Recommended Amendments to the MVSA

353. A specific requirement of this review is to make recommendations on whether any amendments to the MVSA are necessary or desirable.

Recommendation 1: Renewal of Registration of Motor Vehicle Traders

It is recommended that section 39(2) be amended to remove the requirement for motor vehicle traders to make an annual statutory declaration of their trading details where these have not changed. This would be replaced by the requirement to confirm with each annual renewal that details have not changed (see discussion paragraphs 92 to 93).

Recommendation 2: Provision of IRD Number as Part of the Details Required on Registration Application

It is recommended that consideration be given to amending section 32 to include the requirement that applicants for registration as a motor vehicle trader provide details also of their IRD number (see discussion paragraph 98).

Recommendation 3: Technical Amendment to the CC Rating of Motor Cycles

It is recommended that section 6 (b)(iii), the definition of motor vehicle, be amended to exclude motor cycles up to 50 cc (not 60 cc as currently worded) to reflect ratings used on other relevant legislation (see discussion paragraphs 109 to 112).

Recommendation 4: Amendment to Banning Provisions

It is recommended that section 68(1)(c) be amended to ensure that persons convicted of breaches of the MVSA that would invoke the banning provisions while registered, are similarly banned regardless of their registration status at the time of conviction (see discussion paragraphs 122 to 125).

Recommendation 5: Clarification and Tightening of Requirements on Car Market Operators to Provide SIN

It is recommended that section 14 be clarified as to the responsibilities placed on car market operators with regard to providing the SIN, in particular in relation to internet sales and that consideration be given to removing the section 14 (2) provision that requires car market operators only to take reasonable steps to ensure that a consumer provides a SIN, thereby strengthening car market operators responsibility in this area (see discussion paragraphs 193 to 203).

Recommendation 6: Extension of Inspection Powers to Commerce Commission

It is recommended that consideration be given to amending the inspection powers of sections 124 to 129 to also include the Commerce Commission to allow appropriate enforcement of the information provisions of the MVSA (and this should be explored in conjunction with work already in progress regarding similar powers under the Fair Trading Act 1986) (see discussion paragraphs 218 to 219).

Recommendation 7: Exemption from Requirements to Provide a SIN When Transactions Are Exclusively between Registered Traders

It is recommended that section 14 and section 16 be amended to exempt from the SIN requirements, transactions that are exclusively between registered motor vehicle traders, and between registered motor vehicle traders and car wreckers as defined in the MVSA (see discussion paragraphs 221 to 222).

Recommendation 8: Ability to Award Costs to Any Party for Non Attendance at Motor Vehicle Disputes Tribunal Hearings

It is recommended that section 14 of Schedule 1 be amended to allow costs to be awarded against any party to a claim, for non attendance at a hearing for no good cause (see discussion paragraphs 265 to 271).

Recommendation 9: Administrative Procedures of the Tribunal

It is recommended that Schedule 1 be reviewed and administrative procedures amended to reflect those of the ordinary Disputes Tribunal, where appropriate (see discussion paragraphs 272 to 274).

Recommendation 10: Submission of Adjudicators' Annual Reports

It is recommended that section 87 be amended to provide a timeframe within which the Adjudicators' annual reports are to be submitted and to deal appropriately with the receipt of multiple reports (see discussion paragraph 289).

Recommendation 11: Extension of the Jurisdiction of the Motor Vehicle Disputes Tribunal

It is recommended that section 89 be extended to allow the Motor Vehicle Disputes Tribunal to also consider claims under the Consumer Credit and Consumer Finance Act 2003 (see discussion paragraphs 297 to 301).

Recommendation 12: Publication of Decisions of the Motor Vehicle Disputes Tribunal

It is recommended that consideration be given to amending section 94 to allow the Motor Vehicle Disputes Tribunal to direct the publication of a notice of a decision made against the applicant, where there is a public benefit in so doing (see discussion paragraph 320).

Recommended Amendments to the Consumer Information Standards (Used Motor Vehicles) Regulations 2003

Recommendation 13: Review of the Supplier Information Notice

It is recommended that a comprehensive review of the information requirements and the form in which the information be provided as set out in Schedules I and II of the Regulations be undertaken. This review is underway (see discussion paragraphs 153 to 170).

Recommendation 14: Exemption from Requirements to Provide a SIN When Transactions Are Exclusively between Registered Traders and Car Wreckers

It is recommended that the exemption in section 4 of the Consumer Information Standards (Used Motor Vehicles) Regulations 2003 be extended to include transactions between registered motor vehicle dealers and car wreckers as defined in the MVSA (see discussion paragraphs 221 to 222).