© 2011 itsa Ltd on behalf of the Trading Standards Institute.
It is a criminal offence for a trader to engage in a commercial practice that is misleading in respect to goods and services. Therefore, traders should carry out necessary checks to confirm the mileage. There are specific guidelines in relation to the use of any disclaimers.
In the guide
The legislation
Odometer readings
How does this affect mileage descriptions?
What are the consequences of non-compliance?
What action can a trader take to avoid committing offences?
The legislation
This leaflet specifically deals with how the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) affect the motor trade with regard to odometer readings.
The CPRs are a wide-ranging piece of legislation that make it a criminal offence - as described above - for a trader engaged in commercial practices that mislead in respect of goods and services. The misleading element could be in the form of an actual action or description, or in the omission of facts about the goods or services. The Regulations also allow for action under the Enterprise Act 2002 to obtain a court order to ban a trader from continuing an unfair commercial practice. See our leaflet 'A guide to the Consumer Protection from Unfair Trading Regulations' for further information.
Odometer readings
The mileage indicated by the odometer of a car is a description, and as such it will be regarded as an accurate indication of the distance travelled by the vehicle. It is also likely to be 'material information' that a consumer would wish to know before making a purchase. The Regulations prohibit the omission or hiding of material information, or the provision of it in a manner that is unclear, unintelligible or ambiguous, taking into account all the features and circumstances of the commercial practice.
The Regulations also prohibit a commercial practice that is generally unfair in that it contravenes the requirements of professional diligence and is likely to distort the economic behaviour of the average consumer. In general, this means that you must tell the customer the mileage travelled by the car and ensure that the odometer reflects this.
How does this affect mileage descriptions?
There are a number of practices that would undoubtedly constitute a misleading action and are therefore prohibited, including:
- making a misleading statement by any means. This could include altering an odometer reading (for example, from a higher to lower figure or to zero) or making other false claims (written or oral) about a vehicle's mileage
- supplying or offering to supply a vehicle that has been subject to a misleading action or omission. This could include simply having the vehicle on the forecourt or selling it with an incorrect odometer reading
- it is also an offence to include a false mileage in an advertisement or on or near the vehicle, for example 'low mileage' stickers
Failing to disclose the odometer reading or the fact that an odometer unit was found to be faulty and has been replaced (either with a new or second-hand unit) may be a misleading omission.
What are the consequences of non-compliance?
Failure to comply with the Consumer Protection from Unfair Trading Regulations 2008 is a criminal offence. The maximum penalty on conviction at a Magistrates' Court is a fine of £5,000 per offence. The maximum penalty on conviction in a Crown Court is an unlimited fine and/or two years' imprisonment. In addition, a trader may risk losing his consumer credit licence. It is also possible for a trading standards service to take injunctive action under the Enterprise Act 2002 against the seller.
The offences described in points two and three above would apply even if a trader did not know that the indicated mileage was incorrect - however, the Regulations also provide for a defence to the criminal charges. The legislation requires traders to take responsibility for descriptions applied to vehicles by having checks in place regarding their accuracy.
What action can a trader take to avoid committing offences?
There are steps that a trader should take in order to use the 'due diligence' defence, but this would not necessarily prevent action under the Enterprise Act 2002. In fact, an order under this Act could even direct you to take such steps to avoid the unfair commercial practice.
When buying motor vehicles, always ask about the mileage, make sure it is written on the purchase document. Obtain the signature of the seller declaring whether or not the mileage is correct, incorrect or unknown. Do not rely on verbal statements.
Check that the general condition of the car is both mechanically and bodily consistent with a vehicle of that mileage and age. Look at the service history, and if the car is accompanied by all previous MOT certificates consider whether they show a likely progressive mileage history.
Don't rely solely on a statement by the seller as to the mileage unless they have owned the car from new. Only when the full history is known should a vehicle be offered for sale as genuine mileage.
There are also simple checks you can make using the VOSA website. If you have the document reference number from the V5 and the vehicle registration, you can check the mileage shown on the MOT history (if the vehicle is more than three years old).
A record should be maintained of any checks you have made.
Make sure that all staff who may come into contact with customers are properly trained and instructed in these matters and have access to all relevant details (for example, purchase invoices and results of any checks made).
It is likely that any professionally diligent business would apply the above checks. However, it may still be possible that in some limited circumstances you may still be unable to verify the mileage recorded, and you should state this to customers - this was done under the previous legislation using disclaimers (see below).
Some commercial companies also offer a mileage and history research service.
Disclaimers
If the accuracy of the odometer reading is in doubt, you must make this clear to prospective customers. This is done usually by the use of disclaimers although they are not a specific legal requirement. Disclaimers are an attempt to remove or negate the description of the mileage given by the odometer to prevent the misleading practice occurring. However, the new requirement to avoid a misleading omission and the 'professional diligence' test significantly questions their use under the new regulations. Some practices, such as generally disclaiming all mileages as 'incorrect' without making any checks, are likely to be prohibited. At best, it may be possible to indicate, using a disclaimer, that you have been unable to verify the mileage.
If it can be shown that a reasonably diligent professional could easily discover that the mileage was higher than shown, then this will also breach the regulations. Once such facts are known, they should be disclosed to avoid a misleading omission.
Please note
This leaflet is not an authoritative interpretation of the law and is intended only for guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted. Please contact us for further information.
Relevant legislation
Enterprise Act 2002
Consumer Protection from Unfair Trading Regulations 2008
Last reviewed/updated: October 2012
© 2013 itsa Ltd on behalf of the Trading Standards Institute.
