Rental car offers break law

By JIM EAGLES

The Commerce Commission has continued its crackdown on misleading advertising by successfully prosecuting two car rental companies for imposing unreasonable special conditions.

In the past year the commission has issued 181 warnings, reached 48 settlements and successfully conducted 33 prosecutions. Now, an investigation into the rental car industry has led to a further 10 companies being warned, seven settlements and two prosecutions.

In separate hearings in the Christchurch District Court, Cut Price Rentals was fined $5000 and Leisure Rentals (trading as A1 Backpacker Rentals) $4000 for breaching the Fair Trading Act.

Cut Price Rentals claimed in its Yellow Pages advertisement that cars were available for $25 a day, but the "special conditions" meant the minimum hire period for the low rate was 28 days.

A1 Backpacker Rentals used the phrase "conditions apply" to promote cars from $19 a day.

But that price was available only in off-peak months and the minimum hire period was seven days.

The commission's director of fair trading, Deborah Battell, said the commission had investigated the industry after complaints.

"We took a close look at trading practices ... and found that advertising vehicles from a certain price with linked special conditions was a significant problem."

Ms Battell said the successful prosecutions had underlined the commission's view that such advertising was unacceptable.

"It is by no means confined to rental cars. It is a widespread practice and needs to stop."

The advertising was not only unfair to consumers, but was unfair to traders who provided accurate information.

The court rulings made it clear that "special conditions" must not significantly limit or change the main offer, and that the representation in an advertisement must not be corrected at the point of sale.