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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2015-02-25 Daily Xml
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Unlicensed Car Dealers

The Hon. T.T. NGO (14:37): I seek leave to make a brief explanation before asking the Minister for Business Services and Consumers a question about unlicensed backyard car dealing in South Australia.

Leave granted.

The Hon. T.T. NGO: Buying a car can be an exciting time and a fulfilling experience, but there are some pitfalls to watch out for along the way. Minister, last year you informed the chamber that motor vehicles continued to be one of the top consumer inquiries to Consumer and Business Services (CBS), and CBS would be undertaking a major investigation into unlicensed backyard car dealing in South Australia. My question is: can the minister inform the house on the outcome of this major investigation, including any disciplinary action that has been taken or is being considered?

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (14:38): I thank the honourable member for his most important question. When you buy a car, it is often a major purchase and should be a pleasant experience rather than a daunting one.

Jurisdictions throughout Australia have licensing regimes in place for motor vehicle dealers to ensure a fair marketplace is maintained and that consumers are protected. However, when purchasing a used vehicle privately from someone who is not a dealer, you are not covered by statutory warranty, and there are those out there who might seek to take advantage of consumers by carrying on a business as an unlicensed car dealer. We don't want to see these dodgy dealers tarnish the reputation of the vehicle sales industry, and we don't want to see consumers stripped of their statutory warranty.

I am pleased to advise members that the state's consumer watchdog, Consumer and Business Services (CBS), undertook a four-month major investigation into unlicensed car dealers from September to December 2014. CBS investigators conducted operations across the state, cracking down on the sale of vehicles by 'backyard' and other unlicensed second-hand car dealers.

CBS investigators identified eight matters warranting prosecution and/or disciplinary action under the Second-hand Vehicle Dealers Act, ranging from trading without a licence to trading from unregistered premises. This resulted in CBS securing the surrender of three second-hand vehicle dealer licences from dealers now involved in ongoing criminal prosecutions. I am advised that the briefs of evidence against four other unlicensed dealers are currently being prepared, while a further case has been submitted to the Crown and is awaiting charges.

CBS investigators also received written assurances from seven dealers that they would not repeat their offences and delivered three warning letters for fairly low-level breaches. These backyard dealers were selling multiple vehicles from their homes, offering the consumer no warranty, and the safety of these vehicles is often questionable. I believe one vehicle that was looked at was virtually two cars welded together, so they can be very unsafe.

Unfortunately, there will always be a small number of dodgy car dealers who think they can flout the law and get away with it. However, this major investigation has put those dealers on notice. The state's consumer watchdog will remain vigilant in their efforts to protect consumers and maintain a fair marketplace. CBS worked with the industry throughout this investigation also to ensure that not only consumers but licensed traders are protected from any unlicensed activity.

The major investigation has also seen CBS assisting state and federal law enforcement agencies in intelligence-gathering operations. Collaboration with fellow state or federal agencies is not uncommon for CBS, nor is working with the industry, which I believe contributes to a robust and effective operation. Overall, the investigation found that the level of compliance with the act was high, so consumers should feel generally confident when buying a second-hand vehicle through a licensed dealer, but I remind people that it is in their own interests to ensure that they do check that it is a licensed dealer.

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