Watchdog cracks down on misleading car rental ads

By JIM EAGLES

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

In the past year the commission has issued 181 warnings, reached 48 settlements and conducted 33 prosecutions - all successful - as part of its campaign to protect consumers from misleading advertising.

Now, an investigation into the rental car industry has seen a further 10 companies warned, seven settlements reached and two prosecuted.

In separate hearings in the Christchurch District Court, Cut Price Rentals and Leisure Rentals (trading as A1 Backpacker Rentals) were fined $5000 and $4000 respectively for breaching the Fair Trading Act. Cut Price Rentals claimed in its Yellow Pages advertisement that cars were available for as low as $25 a day, but the "special conditions" meant that the minimum hire period to achieve the low rate was 28 days.

Similarly, A1 Backpacker Rentals used the phrase "conditions apply" to promote cars from as cheap as $19 a day. On investigation, that price was available only in off-peak months and the hire period was for a minimum of seven days.

The commission director of fair trading, Deborah 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, however," Ms Battell said. "It is a widespread practice and needs to stop."