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The Federal Court has ordered Grays eCommerce Group Limited, an Australia-wide online auction business, to pay $10 million in penalties, in proceedings brought by the ACCC.
Grays admitted to making false or misleading representations in the descriptions of hundreds of cars listed for sale on its website between 1 July 2020 and 30 June 2022.
The misleading descriptions included information about the make, model, features or undisclosed obvious faults with the cars. Examples included the wrong manufacturing year or transmission system, listing features that the car listed for sale did not have, and a failure to mention obvious faults (such as damage to the car or active dashboard warning lights).
In February 2024, the ACCC accepted a court-enforceable undertaking from Grays to provide redress to consumers affected by this conduct. The undertaking has commenced now that the Court has made orders. Grays has already contacted some affected consumers to offer redress.
"Grays made false or misleading representations in at least 750 car descriptions on its website. 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, if they had known the correct details," ACCC Commissioner Liza Carver said.
"Affected consumers often had to invest significant time and energy to convince Grays to provide a remedy, and were made to wait months for a resolution. We are aware of some consumers that paid to repair the vehicle that was incorrectly described or re-sold it at a loss."
"Today's orders by the Court reflect Grays' serious conduct which caused an estimated $3.86 million in losses to Australian consumers. Grays' undertaking to pay compensation to consumers is an important part of the resolution of this matter, and provides a meaningful outcome for affected consumers," Ms Carver said.
Grays has also been ordered to establish and maintain an Australian Consumer Law compliance program, and to pay a contribution to the ACCC's costs.
Grays co-operated with the ACCC during its investigation, including by agreeing to jointly seek declarations, penalties, a compliance program and costs.
