An online car dealer, which placed bids on its own Trade Me auctions to artificially raise prices, has been fined $45,000 for breaching the Fair Trading Act.
The Christchurch-based Morrison Car Company pleaded guilty to 55 charges of breaching the Act over sales made on Trade Me. The charges also related to failing to display Consumer Information Notices (CINs) with vehicles.
A Commerce Commission investigation found the company made 344 false bids, known as "shill" or "ghost" bidding, on 39 of its $1 reserve auctions, artificially raising the price of the cars.
"To avoid the risk of breaching the Fair Trading Act, sellers must be prepared to sell the item for $1 if no other bids are received for the item. Sellers cannot artificially raise the price themselves," commission competition branch manager Stuart Wallace said.
"Additionally, none of the cars offered for sale via Trade Me included the display or access to a CIN as required to comply with the legislation and Trade Me's terms and conditions."
