THIS RULING REPLACES THAT PUBLISHED ON 1 MARCH 2017. THE DECISION HAS BEEN REVERSED, MAKING THE COMPLAINT UPHELD.
Two ads marketing approved used Alfa Romeo cars on www.usedcars.alfaromeo.co.uk, seen on 13 May 2016:
a. The first ad featured text that stated “Alfa Romeo Approved Used GIULIETTA ALFA ROMEO GIULIETTA 2.0 JTDM-2 SPORTIVA ALFA TCT 5DR (SAT NAV) IN WHITE £16,995 DIESEL … MANUAL 9,600ML, 64.2 MPG2 CO2 116 G/KM2 GB WV64UGF 64 2014 GLYN HOPKIN FIAT (CHELMSFORD) …”.
b. The second ad featured text that stated “Alfa Romeo Approved Used GIULIETTA ALFA ROMEO GIULIETTA 2.0 JTDM-2 SPORTIVA ALFA TCT 5DR (SAT NAV) IN RED £15,995 DIESEL … AUTO 18,915 MI 64.2 MPG CO2 116 G/KM GB WP14YUG 14 2014 GLYN HOPKIN FIAT (ROMFORD) …”.
The complainant, who understood that the cars marketed in ads (a) and (b) were ex-fleet vehicles, challenged whether the ads omitted material information.
Glyn Hopkin Ltd stated that they were an approved Alfa Romeo dealer and that they had created and posted ads (a) and (b) on the Alfa Romeo website by using the template provided by the site, which was owned by Fiat Chrysler Automobiles UK Ltd (FCA).
Glyn Hopkin stated that vehicles could not be purchased directly from the website and that consumers would be referred to the dealer selling it from the contact details provided. The dealer would then give consumers the information they required to make an informed decision before making a purchase. Once consumers had enquired about the vehicle, all documentation would be made available to them. Furthermore, that information would be stated on the order form along with a declaration signed by the consumer confirming that they accepted the terms of the contract.
Glyn Hopkin stated that they bought the advertised vehicles directly from FCA and that an ex-fleet did not suggest that it had multiple drivers. Furthermore, the actual previous usage, irrespective of the registered keeper, could not be categorically defined on a used car and they stated that such information had not been given to them by FCA.
Glyn Hopkin accepted responsibility for ensuring that the information provided in the ads was accurate. The vehicles correctly stated the standard manufacturer’s description for the models along with individual data with regards to the age and mileage and any extras fitted. However, they stated that the website’s template did not provide them with the opportunity to include additional information as there was no free text option available. Consequently, they believed that they could not be held accountable for the ads as they were only able to provide information that was required within the parameters of FCA’s website, which they had no control over.
FCA stated that they took all reasonable steps to prevent consumers from being misled by their advertising.
FCA stated that the website was owned by them (under their Alfa Romeo brand) and managed by a third-party organisation. The website published ads that were directly created and placed by individual businesses that were members of the Alfa Romeo authorised dealership network. FCA stated that whilst they had access to information on the history of vehicles that they previously owned, they would not however be alerted when those vehicles were being advertised by their approved dealers via the website and therefore, could not approve them prior to publication.
FCA stated that an ex-fleet vehicle did not consequentially mean that it had multiple drivers or was an ex-rental. Furthermore, they believed that a vehicle being ex-fleet was not material information that was likely to influence a consumer’s transactional decision.
FCA explained that the car in ad (a) was used by one of their self-employed contractors, so that they could drive to dealerships and deliver training on FCA’s behalf, but was not driven for demonstration purposes. The car was also used by the contractor for their private use. FCA further stated that the vehicle in ad (b) was an ex-company car used by a member of their own staff. They provided documentation, including screenshots of the cars’ management records, a signed witness statement, internal email exchanges, an inspection report, invoices, and screenshots of their technical training log and utilisation reports (in the form of a spreadsheet) showing information regarding the car in ad (a). Regarding the technical training log and utilisation reports, FCA stated showed that the car had a total mileage of nine miles in the months of October and November 2017, before it was given to the contractor. FCA believed that all the documentary evidence they had provided confirmed that neither car had multiple users or was an ex-rental.
FCA stated that all vehicles advertised by dealers on the website benefitted from an Alfa Romeo approved used car warranty and would also have undergone a multi-point check. This assured consumers that whether a vehicle had been used for private or business use, the same warranty and quality checks had been applied.
FCA obtained input from their industry body - The Society of Motor Manufacturers and Traders (SMMT). They believed that omitting the identification that a vehicle as ex-fleet was not misleading, because mileage and service history were key indicators of the level of prior use. Where mileage and service history were disclosed, the SMMT did not consider that the inclusion of wording such as "ex-fleet", “ex-business use” or "may have had multiple users" were likely to be necessary for a consumer to make an informed transactional decision. This was particularly the case if the ex-fleet vehicle did not have multiple users and could be expected to have been used in a similar manner to privately owned vehicles.
Furthermore, they stated it was impossible to know the nature of ownership throughout a vehicle’s history including whether it had been driven by multiple users at any one time. This was because the V5C registration certificate only identified the current and last registered keeper of a vehicle.
The SMMT stated that an ex-fleet vehicle had no bearing on its condition compared to any other factor about previous ownership. For example, a company car used by only one employee under strict rules of driving and maintenance involved on-going servicing and repair. In such cases, the V5C registration certificate would show the fleet operator/leasing company or employer as the registered keeper for the vehicle, not the employee that used it.
The SMMT believed that the Office of Fair Trading’s (OFT) "Guidance for second hand car dealers" only applied to ex-fleet vehicles that might have had multiple users, and that by describing a vehicle as ex-fleet did not necessarily mean that it had been used by more than one driver. However, they stressed that all fleet vehicles were subject to regular maintenance and servicing. Furthermore they stated that vehicles sold through a brand's used car approved scheme, as was in this case, would have to meet certain standards to reassure the consumer. They believed that it was this reassurance that was valuable to the consumer who would be satisfied that there was a certain level of quality in the vehicle.
SMMT stated that the new car market had changed radically in the UK, through the growth in popularity of Personal Contract Purchase (PCP) and Personal Contract Hire (PCH), where such vehicles were owned by fleet management/vehicle leasing companies. PCH vehicles were returned by the motorist at the end of the deal, while, for PCP vehicles, the motorist may opt to purchase the car outright at the end of the deal, to hand the car back or to part exchange it for a new car. The current popularity of PCP and PCH meant that the industry was likely to see a significant increase in vehicles previously subject to PCP and PCH plans emerging onto the second-hand car market in the coming years.
SMMT believed that this had a direct bearing on the interpretation of the term “ex fleet”. The term did not only encompass ex-short term rental or driving school vehicles (which would have significant numbers of previous users) and ex company cars (which may have had one previous user or multiple previous users). It also included a significant and growing proportion of ex-PCP and PCH vehicles, which, given that PCP and PCH was offered as a straight alternative to privately owning a vehicle, would have had the same or very similar patterns of usage to vehicles previously owned by an individual motorist.
SMMT stated that the nature of vehicle manufacturer employee car schemes could vary from provider to provider. For some schemes, it was the case that any vehicle that was supplied was brand new and only given to one employee. Upon return of that vehicle, it was sold to the dealer network as an approved used vehicle. Because of that, the SMMT believed that many vehicles that were previously used under an employee car scheme would have had one owner and one user. Furthermore, the driver of the vehicle was required to keep the vehicle in pristine condition; otherwise charges could apply upon return of the vehicle. This would result in vehicles being returned at the end of the employee’s period of usage in very high quality condition, and ensured that it was capable of being marketed as an approved used vehicle. On that basis, the SMMT believed there was no difference in the marketing of a vehicle that had been on an employee car scheme from the sale of a typical used vehicle; although they considered that in all probability the vehicle that was previously on the car scheme would be of a higher quality, and likely to have lower mileage, than a standard used car given the strict usage limitations for car scheme vehicles and the short usage periods, which were typically no more than 12 months)
The ASA understood that the website was owned by FCA and that approved dealers had to use the template provided to create and post their ads on the platform. Whilst we noted that Glyn Hopkin were constrained to the type of information they could provide in the ads, they nevertheless produced and placed them on the website, and were therefore jointly responsible with FCA for the content.
We considered that consumers would clearly understand that ads (a) and (b) were marketing used Alfa Romeo cars. The cars appeared on the used car section of FCA’s website and were described as “Used GIULIETTA ALFA ROMEO GIULIETTA”. The cars’ manufacturing year (2014) and total mileage (9,600 and 18,915 respectively) were also stated.
We understood that ex-fleet vehicles were those which had been leased out to companies for businesses purposes (e.g. car rentals, taxicabs, company cars). Furthermore, we understood that following changes in the car industry vehicles were now being leased to consumers under a PCP/PCH agreement for their own personal use. However, focussing on this specific case, we noted that the cars in ads (a) and (b) were ex-fleet because they had been used for business purposes whilst part of FCA’s fleet. Therefore, we needed to consider whether that fact that a vehicle was ex-fleet because it had previously been used for business purposes was material information which would influence a consumer’s transactional decision to purchase it.
We considered that vehicles that had been leased out for business purposes and used by multiple users were more likely to have been subjected to wear and tear compared to vehicles that were previously owned by a private owner. We noted the argument that ex-business single use vehicles might be at least as well maintained as ex-private vehicles, for example the driver was required to keep the vehicle in pristine condition lest they incur charges upon return or was subject to strict usage limitations, but we had not seen evidence to demonstrate that this was generally the case.
Because of this, we considered that if a dealer was aware that a vehicle was ex-fleet because it had previously been used for business purposes, then that was material information likely to influence a consumer’s decision to purchase it. Furthermore, if a dealer knew that such an ex-fleet vehicle was used by multiple users, then that too, was material information for consumers to make an informed decision.
The complainant had referred to the Office of Fair Trading’s (OFT) "Guidance for second hand car dealers", which stated that dealers would be in breach of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) if they misled consumers by failing to give them the information they needed in order to make an informed decision before a sale. The guidance provided examples of an omission, including “Failing to disclose that a vehicle for sale is an ex-business use vehicle which may have had multiple users, for example a vehicle that has previously been used for rental, as a taxi or by a driving school - in such circumstances it is not sufficient to only inform the consumer of the mileage and the number of previous owners”. The guidance also stated “You must give consumers the information they need to make an informed choice, before a sale is made. You must not omit or hide such information, or provide it in an unclear, unintelligible, ambiguous or untimely manner […] Non-exhaustive examples of the types of information you should inform the consumer about prior to the sale include […] If the vehicle is an ex-business use vehicle which may have had multiple users, for example a vehicle that has previously been used for rental, as a taxi or by a driving school”.
We obtained advice from the appropriate Government department on whether they considered the above examples from the guidance were material information that would affect a consumer’s transactional decision. Because the OFT no longer existed, as the Competition and Markets Authority (CMA) decided not to continue OFT’s sector specific guidance, we took advice from the Department for Business, Energy & Industrial Strategy (BEIS). They understood that the guidance was no longer available, but stated that the examples contained in it sought to clarify the type of material information a dealer should disclose to consumers under the CPRs, provided it was in their possession. In light of that, they believed that the CPRs did not suggest that a dealer was required to guess or assume that a fleet vehicle had had multiple users if they did not know. However, if the dealer was aware that a vehicle was ex-fleet then that was likely to be material information that would influence a consumer’s transactional decision to purchase it. Furthermore, if the dealer knew that the ex-fleet vehicle had been driven by multiple users, then that too was likely to be material information that needed to be provided to the consumer. However, if the dealer did not know how many users had driven the ex-fleet vehicle, then they only needed to disclose to consumers that it was ex-fleet. Ultimately, it would be for the courts to decide if a breach of the CPRs had occurred.
The advice given by BEIS was therefore consistent with our view on vehicles that were ex-fleet (having previously been used for business purposes), including whether the car had been driven by multiple users was material information likely to influence a consumer’s transactional decision.
We understood that upon a sale of a vehicle, the V5C registration certificate (log book) only identified the current and – if applicable – the previous registered keeper, and not whether it was used as a fleet vehicle, including if it had been driven by multiple users whilst part of a fleet. Regarding the two ads, we considered that as FCA was the registered keeper for the vehicles it was reasonable to expect that they could provide records showing how they had used them whilst under their ownership as a fleet operator, including whether they were driven by multiple users. Furthermore, because Glyn Hopkin was an approved FCA dealer and had purchased the cars directly from them, we considered that they were capable of easily obtaining such information as well.
We understood that the car in ad (a) was used by one of FCA’s self-employed contractors to provide technical training in the operation of FCA’s internal systems for dealers and for the contractor’s private use. The screenshot of the car’s vehicle management record showed boxes of information including when it was allocated to FCA (23 September 2014) and registered (24 September 2014). Adjacent to one of the boxes was the text “Department” with the corresponding text “TRAINING”, which FCA had explained indicated the way in which the car was used. This clearly indicated that the car was ex-fleet having been used for business purposes, which we considered was material information consumers needed to make an informed decision before purchasing it. However, we noted that such information had been omitted from ad (a).
The record showed that the “DeFleet Date” for the car was 15 January 2015, which was refurbished in mid-January 2015, and. referring to the invoice FCA had provided, the car was later purchased by Glyn Hopkin on 6 March 2015. We considered that given the car was defleeted on 15 January 2015, there were no further users after that date.
The internal FCA email exchanges and the screenshot of FCA’s technical training log showed that the car was given to a named individual on 11 November 2014, which FCA claimed to be the contractor. However, we noted that the “User” box (which identified the individual who had been assigned the vehicle) in the car’s management record and the box showing the date when it was handed over to them were blank. Therefore, the car’s management record did not verify that the named person in the internal emails and technical training log was the contractor that had been allocated the car.
In the email exchanges the training department confirmed to FCA that at the time the fleet car was assigned to the named individual, it was new and had not been previously used. FCA provided a signed witness statement (dated 16 June 2017) from their technical training manager, who stated that after the car was allocated to one of FCA’s training departments on 23 September 2014, it was registered to FCA the following day. Thereafter, it was imported to the training facility on 25 September 2014, as shown in the technical training log, and had not been used until it was assigned to the named individual on 11 November 2014. The named individual returned the car one/two days prior to 8 January 2015 to the training centre, when it was then disposed of. The training manager believed this to be the case as no other name appeared in the technical training log. However, we noted from the data that there was an unaccounted period of six weeks of how the car was used after it arrived at the training centre, if at all, before it was given to the named individual in the training log. The witness statement further explained that vehicle management records detailed the department to which vehicles were assigned to and, in the case of training department vehicles, would not identify the individual user.
We referred to the screenshots of the utilisation reports and noted that the car only had a total mileage of nine miles in November 2014, which we understood was when it was handed-over to the contractor. We considered this indicated that it was unlikely that the car had previously been used by another driver as a fleet vehicle prior to being given to the contractor.
Because of that information, we considered that FCA had provided sufficient evidence showing that when the car in ad (a) was given to the contractor, it had not been previously used as a fleet vehicle and when returned, was defleeted and sold to Glyn Hopkin. We were therefore satisfied that the car in ad (a) had only been driven by one user whilst it was owned by FCA as part of their fleet. However, we noted that ad (a) did not state that the car had been previously used for business purposes, which we considered was material information consumers needed to know to make an informed decision before purchasing it.
We understood that the car in ad (b) was an ex-company car used by a single employee whilst it was part of FCA’s fleet. The screenshot of the car’s usage record showed that it was allocated to FCA on 10 July 2014 and registered on 17 July 2014. Inside the “Department” box was the text “COMPANY CARS”, which FCA had explained indicated the way in which the fleet car was used by their employee, who was identified in the “User” box. The “Handover Date” was 07/08/2014 and the “DeFleet Date” was 8 January 2015, which we understood were the dates when the car was given to the named employee and then removed from FCA’s fleet after it was returned. The record showed that the car was refurbished in late February 2015 and, referring to the invoice FCA had provided, the car was shortly thereafter purchased by Glyn Hopkin (17 March 2015). We referred to the inspection report FCA had provided for the car, which was carried out on the “Handover Date” before it was signed-off by both the employee and inspector. Furthermore, we noted that the car was handed over to the named employee shortly after it was registered (3 weeks). The report identified the car as “New vehicle” along with the employee’s name, which matched the “User” name in the car’s management record, and a scanned copy of their driver’s licence was included. Furthermore, we noted that the report stated that the odometer reading for the car was only 15 miles when it was given to the named employee, which was also shown in an image of the car’s electronic odometer.
Because of that information, we considered that FCA had provided sufficient evidence showing that when the car in ad (b) was given to the named employee as a company car, it had not been previously used, and when returned it was defleeted and sold to Glyn Hopkin. We were therefore satisfied that the car in ad (b) had only been driven by one user whilst it was owned by FCA as part of their fleet. However, we noted that ad (b) did not state that the car had previously been used for business purposes, which we considered was material information consumers needed to know to make an informed decision before purchasing it.
Therefore, because ads (a) and (b) had omitted material information regarding the cars having been previously used for business purposes whilst part of a fleet, we concluded that they were misleading.
Ads (a) and (b) breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means. 3.4 3.4 For marketing communications that quote prices for advertised products, material information [for the purposes of rule 3.3] includes: and 3.4.1 3.4.1 the main characteristics of the product (Misleading advertising).
We told Glyn Hopkin and Fiat Chrysler Automobiles UK to ensure that their future ads did not mislead by omitting information that they had to show that their vehicles were previously used for business purposes whilst part of a fleet.