Legal action launched against e-commerce business accused of scamming Aussie customers

An Australian online business could face penalties of up to $10m after admitting it misled consumers, but says changes have been made to its service.

An online auction business could receive penalties of up to $10m after the company admitted misleading Australian consumers, but says it has already made changes to improve its service.

Grays eCommerce Group admitted engaging in misleading or deceptive conduct and making false or misleading representations about the details of cars after the Australian Competition and Consumer Commission launched legal action against the business.

The inaccurate representations made between July 1, 2020 and June 30, 2022 include the wrong manufacturing year of the transmission system, listing features that the car did not have and the failure to mention obvious faults such as damage to the car.

ACCC Commissioner Liza Carver said at least 750 consumers had been impacted by the company’s breaches of consumer law.

“Hundreds of consumers may have bought a car they would not otherwise have purchased, or may have paid more than they would have, had they known the correct details,” Ms Carver said.

The ACCC said customers were forced to spend a significant amount of time “convincing” Grays to provide a remedy and were made to wait months for a resolution.

An example of incorrect advertising by Grays eCommerce Group. Picture: ACCC

“The purchase of a car is often a significant financial decision. Consumers rely on their car to get them to work, school or other commitments and they should be able to rely on the description in the auction listing to be correct,” Ms Carver said.

Some customers re-sold their vehicles at a loss and paid to repair the faulty cars they had purchased from the company.

“Businesses must not mislead consumers about what they are buying. If they do mislead them, this is a breach of the Australian Consumer Law,” Ms Carver said.

The company has co-operated with the ACCC during the regulators investigations and have agreed to “jointly seek declarations, penalties, a compliance program and costs”.

The business has contacted some impacted customers to offer redress and the ACCC has accepted a court enforceable undertaking from Grays to provide redress to affected customers.

It comes as the ACCC has warned consumers to remain aware of scammers who are looking to take advantage of affected customers by pretending to make contact on behalf of Grays to facilitate a refund.

Grays has admitted making false and misleading representations about cars and breaching consumer law. Picture: ACCC

Customers should make direct contact with the business if looking for redress.

The company has agreed to make joint submissions with the ACCC to the court that it should pay a $10m penalty for the admitted breaches of consumer law.

Grays chief executive Spiro Haralambopoulos said the company acknowledged it did not fulfill its responsibilities to some motor vehicle customers who purchased cars via the auction platform.

“We have not met our own high standards of customer service and satisfaction, and we apologise to customers who have been let down,” he said.

“Grays is committed to remediating affected customers and is complying with the ACCC’s directions.

“Overall and proportionally, the issue affected a very small number of competitive automotive auctions we facilitated.

“Grays has undertaken a significant transformation process since becoming aware of this matter.”

That includes the introduction of a new and experienced senior leadership team, improvement of its customer service team and processes, and mandatory compliance and policy training for all staff.

The company has also implemented new systems for the auto department, trained staff on the vehicle check-in process and engaged a full-time national complaints manager to action feedback.