Selling and/or Retaining of Suspicious Goods

31 Mar 2020

In recent times the courts have brought to our attention examples of fraudulent activity that has occurred in the automotive industry. Please refer to the following example:

An unsuspecting consumer sold a vehicle privately for a fair price and handing over the vehicle, the consumer received what is a fraudulent bank cheque from what was created possibly with false identification. The seller thought they were assisting the buyer by not filling in the disposal sale details. They also signed over the registration papers to the purchaser. Failing to fill in the details of the disposal notice and only signing the papers created a loop hole for the purchaser. Not confirming the buyer details other than a verbal transaction or checking the identification of the prospective fraudulent buyer also created an opportunity for the buyer. The buyer then at this point cancelled the bank cheque and the seller presented a cancelled cheque to their bank which then ‘bounced’.

The buyer has then proceeded to taken the vehicle once the transaction has been completed immediately has then proceeded to a local Motor Dealer and offered the car for sale as a direct buy as an unwanted trade-in, using the signed registration papers form the original seller.

The issue also, is that the dealer has then paid for a vehicle but have not done their due diligence by getting the identification of the now suspecting seller and then paid a lower price or under wholesale value for the vehicle to get into stock. The vehicle had no encumbrance either. The now suspect seller has been paid and has cashed his money in and got away with funds and is unidentified.

The unfortunate issue is the Dealer now has in place a vehicle paid for in full and what technically falls into Suspicious Goods. And here lies the issue. The Dealer now can be served by an authorised officer of the courts with a Non-Disposal Notice. In this case, the original seller found the car advertised for sale, a few days later online and then proceeded to lodge a complaint and reported fraud. The courts then issued a Non-Disposal Notice on the unsuspecting Dealer therefore now making the car unsellable for a period of 14 days.

If the courts are involved and legal proceedings go ahead, an authorised officer can seek to have the order enforced for a further 28 days until resolved. We note that the courts can issue multiple orders of 28 days at a time until the complaint is resolved. Thus, potentially the Dealer in this case cannot sell the vehicle until a court finds in favor of any party and orders given to sell or release the vehicle and then this becomes a legal matter.

We ask all our Motor Dealers and / or Licensed Repairers to be aware of the rules in place under the Motor Dealers and Repairers Act 2013 and make sure that you follow the correct procedures in making sure staff follow the correct procedures when purchasing goods. If faced with suspicious activity or purchasing of goods (any Motor Vehicles, Parts or Accessories), make sure you do your due diligence and check identification, in particular, when paying for expensive goods and ensure you receive a receipt.

You could lose if you don’t. Don’t be caught out.

Suspicious Goods

Requirements under Motor Dealer & Repairers Act 2013 section 102 , 103.

Section 102. Retention of Suspicious goods.

An Authorised officer who has reasonable grounds for believing that a motor vehicle, part or Accessory or anything that is in possession of Licence Holder has been stolen or is unlawfully obtained may issue a Non-Disposal Notice to the Licence holder.
A non-disposal notice is a notice that prohibits the licence holder for a period of 14 days after the notice is given, from altering, selling or otherwise disposing of the items in way or parting possession of it.
The Local Court may on application by authorised officer, order that the effect of non-disposal notice be extended for further period of 28 days . (More than One application may be made under this subsection).
No licence holder or employee of the licence holder must contravene a notice given Fine $2200.00 per offence.