Dealing with dishonesty

law 04If your money’s been taken by a dishonest car dealer there isn’t much you can do, sadly. A commercial lawyer tells us exactly why

SINGAPORE – Some people argue that you don’t really need the extra services an Authorised Dealer (AD) offers, so why not go to a parallel importer (PI) and try to save as much money as you can?

After all, with some of the highest car taxes in the world, not to mention Certificate of Entitlement (COE) prices, it’s tempting to go for the least expensive option when it comes to buying a car.

But how’s this for a good reason to go with an AD: You’re almost certainly going to get the car you paid for.

Sadly, that isn’t always the case with PIs. Not all of them operate shadily, of course, as there are reputable PIs around.

But there have been cases in the past of customers who placed their trust – and even worse, their hard-earned cash – with the wrong parties, only to end up with a car that wasn’t what they specified or the most negative example, with nothing at all.

What can you do if that happens?

To give a clearer picture on where a consumer stands if they’re on the receiving end of unscrupulous business practices, we sought out the advice of someone with deep knowledge in the area: Adrian Wee, a legal expert in commercial and criminal litigation, and Director at advocates and solicitors Characterist LLC.

What do I do if my new car is defective?
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The first step is to seek repair or replacement from the seller.

If there is a valid warranty then there should be no problem with either, providing the terms of the warranty have been adhered to by both parties. If either option turns out to be impractical, a third may be to seek a reduction in the purchase price.

You’re probably thinking you don’t need a lawyer to tell you that, but here is where it gets interesting.

The Lemon Law is something consumers can invoke to shift the onus onto a merchant to repair or replace a defective vehicle within a reasonable period of six months.

“You should make contact, explain the situation, and give the seller a chance to make restitution. If a settlement can’t be reached, then the final recourse is to file a claim in court,” he says.

Depending on the amount involved and type of dispute, the buyer may be able to file the claim in the Small Claims Tribunal, which oversees claims of up to $10,000.

I paid my deposit ages ago…but I haven’t received my car! What can I do?
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When a seller fails to meet expectations, and is unable or unwilling to meet in the middle, then what’s officially-termed a ‘dispute’ occurs.

“In the event of a dispute, that there are two types: Contractual and fraud,” says Adrian. “The more common contractual dispute happens when there isn’t delivery on what is promised, late delivery, or when there is a disagreement over exactly what was stated in the contract. It may even include misrepresentation.”

The former simply means they haven’t done what they have promised to do, for example, deliver a car of brand X model Y by a certain date. If that happens, then the probable last resort is legal action against the seller.

What if the car sold to you was defective or different from promised

If you were misled or lied to, this falls under the category of fraud, says Adrian.

“Fraud is where the seller has deliberately told you something false to move you towards purchasing a car. This includes lying about the accident history, mileage, and in extreme cases, a difference in the exact model of car (as in engine capacity). This is cheating in the classic sense, so consider making a police report,” he says.

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Fraud is a more clear-cut situation than contractual dispute, since it’s outrightly illegal.

For instance, in June last year, a man who ran a scam involving second-hand cars and fraudulent ownership transfers was convicted and jailed for seven years. A victim who purchased a car from him for $146,000 ended up paying $219,000 as a result.

What happens in a worst-case scenario: you pay a deposit to the PI, and they disappear with your money?

“Should one suffer a financial loss through an unscrupulous seller, the buyer can commence legal action,” he says. “The one thing to bear in mind though, is that in most cases, the action is against the company that sold the car and not the individual owners of the company. In the event the company does go bust, a buyer may have very limited recourse to recover any losses.”

Even if you win your case, if the company is not solvent then the chances of receiving financial compensation are slim, and we should also keep in mind that taking legal action also requires legal fees.  

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In other words, if the PI as a company has gone bankrupt, then it’s likely you won’t get your money back.

In the infamous case of Volks Auto, a company that collected deposits for cars it never intended to deliver, those responsible simply fled Singapore and thus no legal proceedings could be brought against them until they were arrested. Even though one individual eventually returned to face justice, and 10 years in jail, the money itself is not likely to be recovered and hence the victims of the scam are still un-compensated.  

How to protect yourself
Well, the most obvious thing is to buy from a reputable source – and as we’ve stressed, they don’t come more reputable than an Authorised Distributor.

But if you want to walk on the wild side, make sure you leave a paper trail.

Keeping a detailed record will help, everything from contracts to invoices and various agreements. Adrian advises collating and getting all documents in order to set out the basis of any dispute, and this actually starts at the time of purchase, where every last detail agreed upon has been put down in black and white.

The difference in buying from an AD and a PI can be quite stark here. With a smaller dealer or parallel importer, the onus may fall on you, the customer, to ensure that you receive a signed copy of all agreements and documents required — everything should be in black-and-white, in other words.

These are the things which will help immensely if it all goes wrong. What a judge usually wants to see is documentation.

With an AD, clear paperwork is always used from the start of any transaction. But as we’ve shown in many other stories here, it really isn’t only about transparency when it comes to an AD.

Becoming an AD is no easy process. Stringent guidelines from service to sales and aftersales set by car manufacturers with a brand name to protect leaves no room for tomfoolery.

Whereas parallel importers have much less long-term accountability to operate under, mostly because they make a profit by simply buying and selling a car.

Of course, not all parallel importers will fail to deliver as promised, but even in the scenario where you do receive your car, only an AD can offer factory-backed support, and all the care and service that goes into protecting not just your new investment, but all the pride and joy that come with owning it.

That’s the DriveHappy promised offered by Borneo Motors, a dedication to good service that thousands of customers have come to enjoy.

DriveHappy is also a great example of the best possible way to protect yourself from dishonesty: don’t expose yourself to it in the first place.

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