The Office of Fair Trading (OFT) has taken enforcement action against used car buying company webuyanycar.com.
An OFT investigation revealed that nearly 96% of customers who sold their car to webuyanycar.com received less for their vehicle than the original website valuation, sometimes by hundreds of pounds.
While investigating Webuyanycar, the OFT identified the following practices with which it had concerns:
• Giving the impression to consumers that they would be paid the online valuation amount if their description of the vehicle and its condition was accurate, when in fact the final valuation offered at the appointment might also be dependent on other factors (such as market conditions).
• Giving the impression to consumers that their online valuation was valid for seven days when this was not the case.
• Failing to make it clear that the online valuation figure included an amount for any road tax refund, which would be deducted from the final price offered. The consumer would then have to claim the tax refund from the DVLA.
• The use of key performance indicator (KPI) targets for calculating bonus payments to vehicle inspectors that had the potential to encourage unfair conduct. In particular, the use of KPI targets based upon reducing the valuation of vehicles upon reappraisal by an average amount or percentage as against the original online valuation (known as 'chipping'). The OFT found that in some cases this practice reduced a car's value by 25%.
• Failing to make clear to consumers at the appointment that the next working day payment service (which incurs an additional charge of £24.75) was optional.
• Failing to assess customer complaints in a fair, reasonable, consistent and professional manner, in particular as a result of a lack of formal written complaint policies and procedures.
• Incorporating potentially unfair terms in its standard terms and conditions, such as limiting its liability for any damage done to the vehicle during the onsite inspection.
Following the OFT's action, Webuyanycar has promised 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: '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. Company staff should also not be incentivised to cut the valuation that has attracted the customer to the business.'
Richard Harrison, Chief Operating Officer of webuyanycar.com said: 'We've implemented a huge amount of changes over the past 12 months to improve our customer experience, and the feedback from the OFT has helped to shape some of the changes we've made.'
'We've invested so much in improving our online valuation tool, tightening up our procedures, investing in training and asking our customers how we can improve our service.
'We're also investing £300,000 in a new Buyer Training Academy to make sure that our buyers can accurately assess the valuation of a vehicle and our sellers experience consistently high levels of service at every branch.'
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