Grays is heading to court after admitting to including false or misleading descriptions in auction listings for vehicles on its website.
The Australian Competition and Consumer Commission (ACCC) has instituted legal proceedings against the e-commerce site in the Federal Court of Australia.
This comes after Grays admitted it engaged in misleading or deceptive conduct and made false or misleading representations about cars offered for sale on its site between July 1, 2020 and June 30, 2022.
The e-commerce site has agreed to make joint submissions with the ACCC to the Court that it should pay a $10 million penalty for these breaches of Australian Consumer Law.
The ACCC says Grays has cooperated with its investigation.
“At least 750 consumers bought a car from Grays which was incorrectly described,” said ACCC Commissioner Liza Carver.
“As a result, 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.”
The consumer watchdog said various Grays listings had incorrect information for the year, transmission and features of vehicles.
It also said in numerous listings, Grays failed to mention obvious faults like damage to the vehicle or active dashboard warning lights.
The ACCC alleges consumers often had to invest significant time and energy in obtaining a remedy from Grays, with some waiting months for a resolution.
Grays says it has already contacted some affected consumers, while the ACCC says it has accepted a court-enforceable undertaking from the auction site to provide redress to affected consumers.
This will start once final orders are made by the Court.
As part of the undertaking, Grays will need to review complaints, provide eligible consumers with redress, appoint an Independent Arbiter, and provide reports to the ACCC about its redress program, among other actions.
The ACCC is also warning that scammers may use this ACCC matter as a ruse to contact people and falsely claim they can help them get a refund. It warns if you receive a call from anyone offering to help you with a refund, hang up immediately.
In addition to selling vehicles through its online auction platform, Grays also sells appliances, electronics and jewellery.
A statement from Grays chief executive Spiro Haralambopoulos on the legal action has been published in full below:
Grays notes today’s announcement by the ACCC, having worked proactively with the regulator on this matter.
Grays acknowledges that it didn’t 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.
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 is well progressed in the proactive remediation of impacted customers and is in the process of identifying and contacting the remaining customers to discuss their options.
Grays has undertaken a significant transformation process since becoming aware of this matter. Major changes have been implemented, including the introduction of a new and experienced senior leadership team, significant investments in the improvement of our customer service team and processes, and mandatory compliance and policy training for all staff.
We have also implemented new systems and tools for the auto department to assist in the listing of vehicles and have recruited and trained additional full-time employees on the vehicle check-in process. In addition, the company has engaged a full-time National Complaints Manager to action feedback.
Grays is confident these changes have already led to improved outcomes for its customers, as demonstrated through a significant uplift in its Auto Net Promoter Score (NPS) and Trustpilot rating.
Grays looks forward to continuing to facilitate competitive auctions for its buyers and sellers and providing an excellent service that is easy, fair and transparent.