LawJaw

May we congratulate the IMDA on their 'relaunch' of the Association. Free membership is attractive and tempting for any motor trader, but the devil is always in the detail. We believe the * is referring to the terms and conditions. CAVEAT EMPTOR - let the buyer beware The Association has chosen to adopt terms and conditions containing some pernicious terms to prevent members leaving after they joined ‘free’, and can subsequently impose, at will, any level of fees for the next years future membership. The terms and conditions, which are often found in umbrageous commercial contracts (they are illegal in consumer contracts) and limit termination of the contract to only those who write to terminate some 90 days before the end of the contract. Of course, at this time, if the members relationship is unused or of little value, this clause is often overlooked. You put the contract aside thinking that ‘it cost you nothing and you won’t bother to renew’. At the renewal date you then find that you are tied into a contract for a further year, while IMDA are free to increase the renewal amount as they choose - £1, £100, £1,000 or any other amount! These contracts are legal for ordinary commercial organisations but where an association holds itself out to be “non-profit making” and is allegedly passionate about the motor trade, then one has to ask, “Who benefits from the 90-day Clause?”. If the answer is ‘anyone’ except ‘the Motor Trade’, then the original claim in the advertisement of “Free Membership” may be considered misleading and is likely to deceive traders and effect their economic behaviour. Such advertisements are prohibited and constitute a criminal offence. We urge the IMDA to consider deleting those terms and conditions as a matter of urgency. Dear IDMA, In a previous post we asked you who owned Motortrade.me and questioned if there was any personal pecuniary advantage that would influence a prospective members decision to join. This question was not directly answered but we notice that the “benefit of the platform at a value of £420” has been downgraded from being a main benefit and is now referred to as “our very own IMDA platform in association with Motortrade.me”. From this development we can only assume that there is a personal pecuniary advantage to individuals within the association. If that is not the case, then now is the time to say so and answer the original question.

Dear IMDA, Please understand my previous post was not a personal attack on the IMDA or what you wish to achieve. A question was asked on a public forum about a matter that had potential legal ramifications for the association itself as well as for our members who would seek to join. We entered the conversation to bring some clarity to the issue, not to in any way discredit the IMDA. I stand by what I said in my email when you invited Lawgistics to quote for running your legal helpline. I wrote, “I really want the IMDA to work, the industry needs it and the independents are ready for it... but they need to join for the right reasons.” I also wrote, “We are also passionate about giving the independents a voice and have publicly challenged authorities and federations when they have disadvantaged or knocked them.” We are not suggesting that this was the case with the IMDA but felt the forum question had not been answered. You are now an association, offering services to the Motor Trade and it is only natural for us to ask questions on our members behalf and give our opinion... that’s what we do. We are very pleased to see that Motortrademe have now removed the Limited Company from their website which goes some way to meeting the legal requirements and no doubt further changes will follow. We also note with interest that IMDA is to be a non-profit making association which, being altruistic, is to be highly commended. Many such organisations enjoy charitable status and are closely scrutinized by the Charity Commission. For others such scrutiny is left to the public domain. For such organisations with that ethos, comes additional responsibility. They have a fiduciary relationship with their members and potential members and must conduct all transactions uberrima fidei, in the utmost good faith. It must be clear to all concerned that in every transaction there is no personal pecuniary advantage for any officer or employee of the association. However, to comply with the law and ensure an environment of openness and good faith we suggest you should immediately publish the details of ownership of Motortrademe and the platform they provide together with any details of any personal pecuniary advantage that may influence a prospective members decision to join. To fail to do so will no doubt give rise to speculation that you do in fact have “something to hide”.

Hi FHP11, Sorry to hear about your recent trade plates issue, you may find this article from Workshop Magazine interesting...

Hi Jim, I have read the current thread with concern and feel that you should take advice from your chosen Legal Partner as the situation has criminal implications. “Trade Vet” is quite right, MotortradeMe Ltd applied for voluntary liquidation on the 10th December 2016 which was granted on the 28th March 2017. The company was dissolved at that point and cannot legally trade from that date. The website, terms and conditions, and advertising still relate to this Limited Company and is linked with your own. It should therefore be changed. To retort to the “Trade Vet” that he “missed your answer” is somewhat disingenuous. You did not answer the question. You cannot contract with a non-existent Company and any purported contract would be void. If you have contracted instead with a partnership or individual now trading as MotortradeMe then this should have been clearly stated and continue to be made clear in all documentation and to all prospective and current members. If the IMDA wish to act with “the highest levels of professionalism”, be “legitimate and law abiding”, as they require of prospective members, and have “nothing to hide”, then they should make it clear on the website and all relevant documentation who they have partnered and contracted with and who owns the platform being offered to members. To fail to provide this information and leave the website and advertising in its current state will breach, inter alia, The Companies Act 2006 and The Business Protection from Misleading Marketing Regulations 2008. It will also leave current and prospective members at risk. Further it raises questions as to the value of savings for members, against a product that does not appear to be currently available on the market. We too are passionate about the Motor Trade and would not want to see our independent dealers or the IMDA compromised.

We congratulate The Motor Ombudsman on their first birthday and are pleased to read the positive news informing us they have received 40,500 contacts from consumers and raised 1900 cases during their first year. It would certainly appear they are the consumers’ champion. However, to draw any sensible conclusion we would need a little more detail. We note they say ‘40,500 contacts’, which would suggest that normal day to day businesses calls such as someone simply calling to inform them of an error on their website could be included within this figure. The Motor Trade really needs to know how many calls were taken relating to the Motor Ombudsman’s accredited garages, what the nature of the calls and outcomes were. The same goes for the 1900 cases. It would appear that less than 5% of the contacts received turn into cases. We assume ‘cases’ means they resort to taking the ADR route. For the Motor Trade to understand if this is positive news we need to know how many of these cases were resolved at the ADR level and how many ended up in court. How many went in the favour of the consumer and how many went in the favour of the garage. We can understand consumers need to have faith in The Motor Ombudsman and the initial published figures certainly suggest that they may well do. However, the Motor Trade also needs to have faith in The Motor Ombudsman. After all you are the hand that feeds them and without the support of the accredited garages The Motor Ombudsman would not exist. Therefore, it is essential that they are transparent with the figures and help us evaluate the value of their work. The Motor Ombudsman claims that 99% of all new cars sold in the UK are covered by their code. Again, we would like to see proof and not just headline grabbing figures. Also, what about used cars? We note the Chartered Trading Standards Institute have removed The Motor Ombudsman’s original count of 7500 subscribing businesses to their CTSI Consumer Codes Approval Scheme from their website, as it was believed to be incorrect. We now worry that as consumers are getting onboard with the concept of a Motor Ombudsman the Motor Trade is taking a different view. The Motor Ombudsman claims to have 1000’s of accredited garages. However, their own garage finder only lists 2000, far fewer than they originally claimed. We have asked them on numerous occasions to confirm the official number of businesses currently subscribing to their code but sadly they are yet to respond. It would be great to hear that the number of accredited garages have gone up and that they are receiving the same level of support from the Motor Trade as they are from the consumer and that their work is having a positive influence on your business. Then we too could celebrate their first-year of trading under their new name. If you are or were an accredited garage and want to share your experience of The Motor Ombudsman, good or bad, we would love to hear from you.

The GDPR (General Data Protection Regulations) is a European piece of law which will apply to UK businesses from May 2018 and if you want to avoid a fine of up to 20 million Euros or 4% of your annual global turnover, now is not too soon to make sure you have systems in place to comply. Regardless of Brexit, UK businesses will need to comply and to ensure they do so, the Government is preparing what is essentially a UK version of the Regulations which is due to be published in the Autumn of 2017 in the form of a new Data Protection Act. It is thought the new Act will repeal (fully replace) the current Data Protection Act which is now somewhat outdated as on-line business and technology has moved on considerably since its implementation in 1998. While it is currently unclear as to what exactly will be in the new Data Protection Act, it will cover all the requirements of the GDPR as for trade purposes, the UK needs to ensure its businesses meet at least the same standards in data protection as their future EU trading partners. Who advises on and enforces the GDPR? The Information Commissioner (ICO) is the lead body on GDPR. The ICO was set up under the Data Protection Act 1998 as an independent authority to look after public information rights. They provide advice to the public and organisations on issues such as spam texts and emails, CCTV, Subject Access Requests (SARs), opting out of the open electoral register, identity theft and now also the use of drones. They are also responsible for the enforcement of all things data protection. They are very active in issuing fines for data breaches under both the current Data Protection Act and also the Privacy and Electronic Communications Regulations (PECR). They don’t discriminate and fines have been issued to charities, police forces and Local Authorities as well as businesses. For more information read our article GDPR and avoiding a fine of up to 20 million Euros

Sorry my statement has raised your temperature and forgive me for being presumptuous BUT I guess running your own warranties did NOT work out for you. If so your statement 'That's total b*ll*cks' is incorrect... I said, "once you have run your own warranties successfully you will never go back to insurance warranties".

Hi @LOVECARS thank you for the mention. If you email me direct lawjaw@lawgistics.co.uk I will get you out a sample booklet. In answer to your question, many of our dealers include the basic driver cover for 3 months on every vehicle at screen price, setting the claims limit quite low (i.e.£250 - £300). This is to help set expectations and create an opportunity to sell a better level of cover. They then explain to their customer that the driver plus cover is much more comprehensive and comes with a larger claims limit (i.e. £500-£1000) and it includes the cam belt and a lot of the electrics. They offer an upgrade to driver plus for the first six months for a reasonable amount (i.e. only£50 - £75). They also explain that driver optional cover would cover the turbo, ABS, air con and cat, and would normally cost £25 for the first six months. The dealer then explains that if the customer decides to upgrade today they will include driver optional cover within the driver plus upgrade! Therefore the customer gets 'TOP LEVEL COVER' for the first six months with a better claims limit for a very reasonable price. This is a very popular way of using our Driver Warranty Booklets helping create more revenue BUT they have been designed to be flexible, creating many different ways of using them to market your stock and manage any warranty issues. I hope this helps... good luck with what ever you choose. One thing is for sure, once you have run your own warranties successfully you will never go back to insurance warranties.

Hi Justina3... my opinion could be a perceived bias, therefore no comment. However here's a hint, google 'run your own warranties'

Hi Fixedgear, I can confirm my advice still stands even though we have said goodbye to the Sales of Goods Act... however I would like to clarify, a private seller 'could' be liable for mis description (just not satisfactory quality, fitness for purpose etc).

No comment

Thanks for business Mat C and the mention... we hope the booklets are working well. They actually cost £6 per booklet OR less if you buy more... do not worry, you did not pay £8, I checked and have also sent you a small thank you in the post

Thank you for your business Max! I had to share your comment with the sales team, they found it very amusing when I told them 'Max Branning' was buying our trade sales pads Assuming the pads are the October 2015 version and not a previous version and as long as your actual advert is just as clear re the sale being on trade terms only then you should be OK. I say ‘should’ as Trading Standards may still take an interest if they think they have evidence that you are selling to consumers but we successfully argue against Trading Standards in these sort of cases on a regular basis. As someone else said, TS are stretched these days, and so they need to concentrate on those traders who are blatantly ripping off consumers and putting them in unsafe cars rather than arguing over legal technicalities.

Thanks for giving us a nudge on this one Dave, there are a lot of issues in this thread and therefore we will deal with some headlines and then put together a fuller response in one of our next legal updates. First off, if this is a regular practice of yours Max and you allow sales to consumers (which this person will no doubt now claim to be), then Trading Standards may well become interested and try and argue that you are attempting to get around consumer rights laws. To counteract this you need, as Umesh has highlighted, to hold some sort of evidence that each individual buyer is a trader as Section 2 of the Consumer Rights Act 2015 puts the onus on you to prove that your buyer is not a consumer. I don’t know what is on your trade sale invoices but ours have in large bold font – Important – Notice For Trade Sale which underneath says “It is expressly agreed that the purchaser of the vehicle sold on this invoice is a business and is not dealing as a consumer for the purposes of the Consumer Rights Act 2015”. Further down it then states that “Implied terms as to satisfactory quality/fitness for purpose do not apply to this transaction”. And then above the buyer signature it contains the words “I confirm that I have purchased this vehicle as a Trader/Trade business”. If this sort of wording is in your advert, all the better. We had a similar case in court recently and we persuaded the judge that the advert was transparent leading him to remark that “nothing in the advert amounted to misrepresentation” – in other words the dealer had made the terms of the sale very clear meaning a claim for a full refund plus costs was reduced to a small repair (this was not on one of our invoices exempting satisfactory quality and fitness for purpose hence the repair award under Sale of Goods Act 1979 - which still applies to B2B sales unless specifically exempted). In short, if your advert is clear and your sales paperwork is clear then you are putting yourself in the best position to defend a claim against these buyers who want a trade price but not the trade risk. As an aside, you haven’t said if your ad was on ebay classifieds or ebay auction. If auction, then we believe there is room to argue that normal auction rules apply as ‘guv’ Jack Regan has suggested.

To be clear... not all finance companies have taken this route. However, our experience is that finance companies will sometimes roll over too easily on fear of the customer escalating any complaint to the Financial Ombudsman Service (FOS). Part of the finance companies reluctance to let the FOS investigate a complaint is that FOS will charge them a fee of £550 for each investigation (from case 26 onwards - they get 25 ‘free referrals’ a year). Now what some finance companies are doing to make their own life (and so that of the consumer) considerably easier is to get the dealer to sign a contract which binds the dealer to cover any losses from any complaint from the customer. Terms to look out for include: “The obligations of the dealer are intended to apply in addition to the rights and remedies available to the customer under any other statutory provision”. (so anything and everything is covered) “The Finance Company shall in its sole discretion determine an appropriate reduction in price.” (so no consultation with the dealer is necessary) “If a customer exercises their right to reject, the dealer will pay the entire purchase price back to the finance company and give the customer their entire deposit back”. (so no deduction for usage allowed) “The finance company can claim all losses etc following a breach or alleged breach”. (customer doesn’t have to prove anything merely allege a breach) Variations of the above have been found in recent terms and conditions sent to us by concerned dealers. However, we have also seen examples of fairer and more reasonable terms from finance companies which, for example, specifically include the right for the dealer to refer the matter to an expert for determination in the event of a dispute. In short, consumers already have an abundance of rights and so there is no need for finance companies to add to those, especially when in doing so they are arbitrarily passing on the cost to unsuspecting dealers.

Since publishing this news we have been flooded with agreements to check AND yes we can tell you the name of this particular finance firm however the point of the news is to advise car dealers to read what they are signing. We have found more examples of these nasty clauses, different finance houses, all slightly different so it would therefore be better if we could find the finance firms WITHOUT these clauses rather than just shaming those who have. I have sent you a PM

A well-known finance house who shall remain nameless for now (you know who you are), has dreamt up a novel wheeze to ensure that all the nasty bits of Section 75 of the Consumer Credit Act (CCA) and more besides will be neatly and unceremoniously dumped on any poor unsuspecting dealer whenever the finance house (and they will) decides to capitulate to even the most spurious of consumer gripes. This week we have been asked to cast our expert legal eyes over some new finance terms and conditions, which have sneaked into the market. It is clear that the terms intend to ensure that the finance house will be fully indemnified by the dealer for any consumer complaint no matter how trivial or unmeritorious, which goes above and beyond all the nasty bits of the Consumer Rights Act (CRA). We have recommended that our client should not sign the new agreement under any circumstances since it is onerous and patently designed to avoid any Financial Ombudsman Service (FOS) referrals or any defence from us. Great for the finance house, rubbish for the dealer! Perhaps not so great for the finance house in question and any others that follow their lead, if dealers vote with their feet and take their business elsewhere. We heartily recommend dealers do just that. Dealers are urged to read the small print always and if in any doubt contact us.

We have had a busy couple of weeks with contact from a number of clients seeking advice on a potential scam letter they have received regarding VAT registration numbers. We have been asked to advise on a letter from “UK- DATA CONTROL” The letter says that there is missing information about your VAT registration number and asks for businesses to update the VAT registration number on their database. The letter states that this is free, however, we have been advised that businesses have actually been charged £790.00 for 3 years membership. Membership means that your VAT registration number is published on their database for 3 years. We understand there is no particular benefit or need to have this information on their website and we would advise that the information is not given to the company. UK Data Control appear to be a business based in Hamburg and are not linked to HMRC or any other public authority or official entity and therefore this is not a request or demand for this information that you are obliged to give, despite the ‘deadline for submission’ date that is on most of these letters. If you receive a letter like the one stated above and are a member then please do contact us for advice.

Hi S and B... thank you for your appreciation. We thought you may be interested in our recent update on the subject... http://hwcdn.libsyn.com/p/7/7/4/774fb91baf312ef4/Legal_Help_Desk.mp3?c_id=10465982&expiration=1450096930&hwt=195b2955862420b4e5ae2b10485d31a0

Hi Max, any refund should be paid in the same manner as given and so technically, the customer should receive a refund of their payment plus their PX. However, this is clearly not going to be practical and the Consumer Rights Act does account for the situation where you cannot return the PX and in that case, the customer is entitled to a refund of any money they have paid plus an amount in damages for the PX.

On premises sales, off premises sale and distance contracts …All of these are caught by The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 which came in last year. Most sales by our dealers will be subject to the ‘on premises’ sales rules within the Regulations given that an on ‘on premises’ sale is defined in the Regulations as: A contract between a trader and a consumer which is neither a distance contract nor an off premises contract. So on a very general level, if you are not operating an organised distance selling scheme or going to people’s homes to complete a sale, you will be selling by way of ‘on premises’. The fact that these Regulations contain the word ‘information’ in their title does give a clue that even ‘on premises’ sales require you to give certain information to your customers. The required information is set out in Schedule 1 of the Regulations and includes the requirement to provide your complaint handling policy. To check if you are complying with all the information requirements, do check Schedule 1 . For more details on the updated Distance Selling Regulations you can listen to our podcast .

Good News Car Dealer Forum members... and you heard it here first... you can 'help' sell a customers’ or fellow motor dealers’ vehicle on a 'sale or return' basis and NOT be liable under the Sales of Goods Act. You (the dealer) will act as an agent for client (the seller), if you advertise the car on your forecourt or website it must clearly state... ‘This is a sale or return vehicle, we are selling it on behalf of a client and it will be invoiced accordingly’. When you sell the vehicle DO NOT invoice it from yourself (the dealer), the invoice should be from your client (the seller). You will not be responsible for any sale of goods issues however you will be jointly and severally liable for any misdescription AND in the event that the vehicle is a clients vehicle and the client misdecribes it, you (the dealer) may be in the unfortunate position whereby you become liable while the client, not being in a trade or business, is not! So make sure any descriptions are correct. Interestingly, if the client (the seller) is a fellow motor trader they will be liable for any sale of goods issues NOT YOU. Any sale or return agreement should be strictly controlled and any agreement put in writing... make sure your name logo etc are not on the invoice... you are only an agent working on commission... AND make sure your customer is aware of this from start to finish of the sale process. You can buy Lawgistics Sale or Return Agreement Pads on both AMAZON and EBAY. Hope this helps

Morning Colin... we would love to know whether there is good reason why the dealer portal leaves certain fields of information, entered by the dealer (AT's client), out of the actual online advert the consumer views... this includes fundamental information such as number of owners?

Hi BrokerMan, I agree that running your own warranty vs paying to include a 3rd party one will definitely save a dealer money. However I DO NOT agree this will exclude you from selling up. I know of many dealers selling their 'own' warranties... 6 month/1 year or even 2! It is all about the paperwork... the T + C's. It is a simple contract between 2 parties - If the customer promises to do X,Y and Z you will do A,B or C. Call it a warranty, service contract or guarantee... call it what you want BUT if there is no 'transfer of risk' (your own warranty) it is not an insurance and you will not have to get involved with the FCA. Obviously the VAT man will want his cut BUT if your paying more VAT you will be taking more money

At Lawgistics we receive many enquiries from used car dealers where their customers have become very dissatisfied as a result of an insurance warranty claim taking too long to resolve or being turned down due to a loophole. Sadly many used car warranties do not live up to the 'peace of mind' they first promised. And unfortunately, when your customer becomes dissatisfied with their warranty it reflects badly on you and your car sales business. As a vehicle retailer you have Sale of Goods duties and the warranty (which should enhance basic Sale of Goods rights) often has less customer rights than are automatically there when a vehicle is sold. We talk to car dealers every week that view warranties as their own protection and often turn customers with problems away, hiding behind the warranty and refusing a customer claim. Your customers' legal rights cannot be restricted by the warranty and they can always potentially claim for compensation arising from the breakdown of a component that has failed. For instance, a failed timing belt often leads to a serious engine failure and a failed cylinder head gasket can lead to a 'cooked' engine. There may be a charge for recovery or vehicle hire and in some cases the consequential loss may extend to an overnight stay in a hotel. Unfortunately, you could be liable for all of this and much more! At Lawgistics we regard warranties as a defence mechanism not 'customer peace of mind'. The customer has peace of mind under the Sales of Goods Act and the warranty simply provides a set of instructions on how to make a claim if there is a problem. And this is why we recommend dealers to run their own warranties... read more