The Commissioner for Consumer Protection, Trish Blake has announced there will be zero tolerance of motor vehicle dealers who continue to use outdated and illegal contracts.
According to Ms Blake, Consumer Protection will be cracking down on them as the incorrect or outdated sales contracts state a cancellation fee that is higher than what is now legally allowed.
“Since 1 January 2022, the maximum amount dealers can charge a consumer who cancels a purchase contract is five per cent of the contract’s value,” Ms Blake said.
“Previously, sellers could charge up to 15 per cent as “pre-estimated liquidated damages” (PELD).”
She said a dealer in Perth’s northern suburbs has been issued with two infringement notices after buyers signed outdated contracts which stated the old 15 per cent PELD fee.
“Consumer Protection received 47 complaints in 2022 relating to disputes over fees charged after contract cancellations, double the number lodged in 2021. Most complaints have been resolved,” Ms Blake said.
“Our officers will be taking enforcement action against dealers who break the current laws by getting their clients to sign sales contracts that contain the higher amount, or worse, charge them the higher amount when they cancel.”
She said that to comply with the current laws, the sales contract must now state a five per cent maximum PELD fee and consumers needed to be aware of this reduction if they found themselves in the unfortunate position of having to cancel a motor vehicle sales contract.
“There is no cooling off period for vehicle sales in WA so buyers need be certain before signing a contract and make sure they can afford it, as cancellations can be costly,” Ms Blake said.
“Dealers should not automatically charge the maximum five per cent fee, as the amount needs to realistically reflect the actual costs of the cancellation to the business.”
