Bulletin for all Licensed Motor Car Traders

Consumer Affairs inspections on LMCTs

VACC has been advised of a recent surge in compliance inspections on LMCTs carried out by Consumer Affairs Victoria (CAV) Compliance and Enforcement Officers.

The following areas of compliance may be reviewed upon any visit by CAV inspector:

What areas of compliance might CAV be focusing on?

As part of the compliance and enforcement activity, CAV may focus on the following areas of obligation an LMCT has under Motor Car Traders Act & Regulations:

Dealings Book

CAV may inspect your dealings book. If you keep an electronic dealings book, it must be accessible at each location where you conduct business, you must also keep all relevant signed electronic documents which identify the vehicle, and the person’s name and address. This is the case unless you print out the entry and obtain the signature of the person with whom you traded the vehicle.

As previously advised, CAV considers demonstrator vehicles to be treated as used vehicles. As such, traders are advised that demonstrator vehicles must be recorded in the dealings book. The relevant form 5 must also be attached. This issue has caused confusion amongst dealers. It has also created an additional work burden for some brands.

Form 5 Used Motor Car Price and Data Sheet

CAV will look to ensure that the current version Form 5 is being used (current version VACC Rev Nov 14). Please note that these forms changed in November 2014. Any traders using window displays Form 6, 7, 7a or 7b are informed that they are not using the current regulated forms. Please be advised that contrary to past CAV interpretation of the Act, LMCTs can have a ‘NOT YET READY FOR SALE’ sign on a vehicle. It is important to notice in this instance that the vehicle must also have a current version Form 5.

Contracts of Sale
CAV will review your contracts of sale to ensure compliance with the Act. The current version for VACC Contracts of Sale for New Cars and Used Cars is Version 11 October 2016. Please note, under Section 82AE (1) (a)(b)(c) or (d) of the Act, CAV Inspectors have the right to either make copies or seise copies of all paperwork prescribed under the Act.

LMCT Number

CAV will be looking to ensure that LMCTs are complying with Regulation 7 of the Motor Car Traders Regulations. Regulation 7 requires LMCTs to use a prescribed sign. The sign must also be clearly visible to a consumer.

It is important to note that contrary to past CAV interpretation of the Act that there is no requirement for an LMCT to have its LMCT number printed on a business card.

Form 3 & Police Check

CAV will view personnel files to ascertain whether a Form 3 and police check has been completed for any person employed in a customer service capacity from 1 December 2008. If any member has issues with this, you are encouraged to call VACC Industrial Relations on (03) 9829 1111.

Price Advertising

CAV will research your dealership before arrival. In most instances, they will have printed copies of recent advertising carried out by your dealership. Sources for these advertisements will include online, social, local and mainstream newspapers and periodicals.

Typically, CAV is looking for compliance with advertising requirements as mandated under Australian Consumer Law provisions. To view a copy of the ACCC guidance ‘Pricing manual for the motor vehicle industry please click here.

Transfer of Motor Vehicle

Particular emphasis will be placed on the legislated requirement for LMCTs to lodge with VicRoads a completed transfer of registration application and all transfer fees, including duty. You must lodge paperwork and payment within 14 days of selling any vehicle. This is also monitored by other agencies such as the State Revenue Office. Failure to transfer a vehicle within the legislated time frame is a serious breach. It also an instance where an audit trail is created and action can be taken.

It is the view of VACC Executive Committees that consignment selling, failure to pay fees, presenting dishonoured cheques, lodging transfer documents and/or not discharging security interests in a timely manner are all early signs that an LMCT may be in financial difficulty.

LMCTs are advised that these are just some of the more basic areas that CAV may investigate.

What Are Other Punitive Measures Available to Government Agencies?

LMCTs have legislated obligations under the Motor Car Traders Act, Duties Act and Australian Consumer Law that they need to meet. LMCTs should also note that other actions such as an inquiry at VCAT, loss of license and criminal or civil prosecution are available to the various Government Agencies.

Is There Any Other Place to Find Information?

In an effort to assist LMCTs with as much information as possible you can take the following link that will provide further guidance to LMCTs about their business rights and responsibilities. Other information relating to Motor Vehicle Duty and VicRoads information can be sourced via the highlighted links.

Any members experiencing any dilemmas in meeting their licensing obligations are encouraged to call VACC. Members who have any feedback from any CAV visits are encouraged to call VACC. We are looking to celebrate members ‘caught’ doing the right thing.