Action taken against online car dealer

The Office of Fair Trading (OFT) has taken enforcement action against Rochdale based webuyanycar.com over concerns that its online valuations were misleading.

An OFT investigation found that nearly 96 per cent of customers who sold their car to webuyanycar.com received less for their vehicle than the original website valuation, sometimes by hundreds of pounds.

Consumers were given the impression that they would be paid the online valuation if the company's onsite inspection matched the condition entered by the seller online. But once at the appointment, some customers found that other factors reduced the final price from the headline valuation, including 'market conditions'. The OFT also found that vehicle inspectors were set targets regarding the purchase of vehicles, sometimes to reduce the valuation offered by up to 25 per cent, upon reappraisal.

Furthermore, sellers were given the impression that the online quote was valid for seven days, so were encouraged to make an appointment quickly. The OFT was concerned that, once at webuyanycar.com's premises, consumers might accept a reduced valuation, even if they were unhappy with it, because of the time and expense already incurred, or because their personal circumstances meant they needed a quick sale.

The company fully cooperated with the OFT's investigation. Whilst the company and its directors believe that their business practices complied with the law, they have agreed to make changes in light of the OFT's investigation. The company and its directors have signed undertakings that include promises to:

Make clear that the website valuation is not a price at which the company is offering to buy the consumer's car and that a range of other factors might be taken into account

Not set targets for vehicle inspectors which have the potential to encourage them to reduce the valuation offered for inappropriate reasons

Not deduct from the final price the amount of any refund available to the customer from the DVLA for the road tax remaining on the car

Make it clear to customers that the next working day payment service (which incurs an additional charge of £24.75) is optional.

Cavendish Elithorn, Senior Director of the OFT's Consumer Group, said: “Selling personal possessions through the internet is increasingly popular, especially in these tough economic times. But it's important that the headline figure isn't chipped away at by the buyer, because it makes it very difficult for consumers to shop around and find the best deal.

“This action makes clear that online businesses offering to purchase cars or other goods must provide clear upfront information on pricing and about how their service operates and company staff should not be incentivised to cut the valuation that has attracted the customer to the business.

“The growth of new business models on the internet can bring major benefits for consumers, businesses and the UK economy. But for this to work, people need to be able to trust the deals they are offered.”

Richard Harrison, chief operating officer of Webuyanycar.com, told the Press Association that the OFT findings did not reflect current practice. He added: "In the early days, we were operating a new business and defining a new market sector and we didn't get it right for every single customer. This was a long time ago and isn't reflective of the business we are today."