Grays agrees to pay $10m fine for misleading car ads on its website

Online auction platform Grays has agreed to pay a $10 million fine for allegedly providing false or misleading descriptions on hundreds of cars for sale on its site over a two-year period following Federal Court action by the consumer watchdog.

The Australian Competition and Consumer Commission has alleged that Grays eCommerce Group duped at least 750 customers into buying cars that were advertised with misleading details about their make, model or features.

Some even had ‘obvious faults’ that were not disclosed to buyers, which the ACCC says may have led many to pay more than they should have for the vehicles.

Grays has admitted to having breached Australian Consumer when advertising cars on its website between 1 July 2020 and 30 June 2022.

After co-operating with the ACCC inquiry, it has agreed to make joint submissions with the ACCC to the Federal Court that it should pay a $10 million penalty for the breaches.

“At least 750 consumers bought a car from Grays which was incorrectly described,” says ACCC Commissioner Liza Carver.

“As a result, hundreds of consumers may have bought a car they would not otherwise have purchased, or may have paid more than they would have, had they known the correct details.”

The ACCC says some of the misleading car descriptions included the wrong manufacturing year or transmission system, as well as features that the car didn’t have.

Among the obvious faults not mentioned in the listing were damages to the car or to active dashboard warning lights.

The consumer watchdog says consumers often had to invest ‘significant time and energy in convincing Grays to provide a remedy’. Sometimes they had to wait months for a resolution while others had to repair at their own cost the vehicle that was incorrectly described. Some on-sold it at a loss.

“The purchase of a car is often a significant financial decision,” says Carver.

“Consumers rely on their car to get them to work, school or other commitments and they should be able to rely on the description in the auction listing to be correct.

“Businesses must not mislead consumers about what they are buying. If they do mislead them, this is a breach of the Australian Consumer Law.”

The ACCC has accepted a court-enforceable undertaking from Grays to provide redress to affected consumers and the company has already contacted some affected customers to this end.

While the undertaking by Grays will start once final orders are made by the Federal Court, the ACCC has warned consumers to be wary of scammers pretending to make contact on behalf of Grays to provide a refund.

It says any consumer who has queries about eligibility for redress should contact Grays directly.