SMMT today added its support to a trading standards report
calling for better protection for Internet shoppers. Called Surfing the Big
Wave, the report highlights problems in policing the web and calls for a properly
trained body to ensure that consumer protection rules are enforced on the net
as well as in the high street.
The report comes following the collapse of several motor web
sites, leaving many who have paid deposits high and dry. Media reports have
also focussed on delays and episodes of poor customer service from car e-tailers.
The misuse of illegal price comparisons in particular concerns
the industry. Many web sites imply that the manufacturers’ list price is what
consumers must pay if they choose to buy from a UK dealer, breaking laws on
advertising. While the list price is used as a guide, many consumers negotiate
significant discounts through local franchised dealers.
SMMT chief executive Christopher Macgowan said, ‘We believe
that the law on advertising is clear but that many web sites choose to deliberately
flout the rules. Price comparisons must be based on like for like, so to suggest
that a list price is not open to negotiation and that savings can only be made
through a web site is wrong. It ignores the savings consumers can make through
UK franchised dealers and we welcome trading standards’ call to tighten the
net on all aspects of web retailing.’
Notes to editors
- On 23 April 2001 the Control of Misleading Advertisement
Regulations came into force. These prohibit the use of comparative advertising
that misleads consumers. The Regulations follow the DTI’s Code of Practice
for Traders on Price Indications which states that price comparisons should
only be made if they are ‘accurate and valid’.
- The list price for a vehicle is intended as a guide and
is similar to recommended retail prices used for white goods. Franchised dealers
are free to offer discounts. The price the consumer pays at the showroom is
the retail price which reflects a true comparison with web retailers prices.
- The Alliance and Leicester New Car Price Index first started
reporting pricing trends on a monthly basis in July 1999. Since then the average
retail price of a new car has fallen every month. The largest month on month
drop was reported in December 2000 when the average price of a new car fell
by 10.4 per cent.
- In the first five months of this year new car sales to private
buyers have risen by more than 18 per cent, the result of competitive pricing,
better specifications and longer warranties.