I move:
That Seanad Éireann approves the following Order in draft:—
Consumer Information (Advertisements) (Disclosure of Business Interest) Order, 1984,
a copy of which Order in draft was laid before Seanad Éireann on 11th April, 1984.
Consumer Information (Advertisements) (Disclosure of Business Interest) Order, 1984: Motion.
This motion arises because I regard it as necessary to introduce a legal measure to deal with the problem of what may be referred to as "disguised business sales". These sales are ones where someone who is selling in the course of a trade, business or profession poses as a private seller in order to avoid his legal obligations. The purpose of this order is to ensure that professional, trade or business sellers do not hide their commercial status in advertisements.
The Principal Act protecting the legal rights of consumers when buying goods from business sellers is the Sale of Goods and Supply of Services Act, 1980. This Act provides that where a seller sells goods in the course of a trade, business or profession a condition is, in general, implied into the contract that the goods are of merchantable quality, that is to say, that they are as fit for the purpose for which goods of that kind are commonly bought and as durable as it is reasonable to expect, having regard to any description applied to them, the price and other relevant circumstances. In addition, if the buyer specifies a particular purpose for which the goods are being bought, they must be fit for that purpose.
These conditions do not apply where the consumer buys from a private individual, that is, one who is not selling in the course of a business. There is, therefore, a temptation for the seller to represent himself as a private individual. I believe that the problem is particularly acute in the case of motor cars sold through the small advertisement columns of newspapers. Here there seems to be a hard core of traders trying to avoid their legal responsibilities and, unfortunately, succeeding in doing so by hiding their business status. I would hasten to add that most motor traders indicate their status and, indeed, I am happy to say that the Society of the Irish Motor Industry have given their full support to the present proposal, as indeed have other bodies which have been consulted.
Finally, I would like to make it clear that it is only where a reader is likely to be misled as to the status of a business advertiser that an explicit indication of this status is necessary. The order will require that it must be reasonably clear from the advertisement that the goods are being supplied in the course of a trade, business or profession and thus it will not be necessary to have, in each advertisement, an explicit indication that it is a business advertisement. This meets the concerns of industry, as expressed to my Department.
I welcome this order. My question to the Minister in relation to the previous order has been more or less catered for in this order with regard to motor cars sold through the small advertisement columns in newspapers. Serious abuses have taken place and are still taking place in this area. If this is confined solely to advertising, does it affect door-to-door sales people who have a professional approach to selling goods, many of which, however, are of inferior quality?
I welcome this order, which is a protection for the consumer. It specifies the situation that arises regarding car salesmen who are not registered for VAT or PAYE, who pay no income tax or rates and who can set up a business from rented accommodation in any town by placing small advertisements in the local newspapers. I know of many such cases. The order may have been formulated because of this abuse with people making small fortunes dealing in these secondhand cars. With no restriction, there is no compulsion on the buyer to beware. When a person finds something wrong in effect he has no comeback.
I am also particularly pleased to see in this order that if the buyer specifies a particular purpose for which the goods are being bought, they must fit that purpose. In too many cases the seller actually says that they do fit the purpose, conning the consumer into believing that that is the case and the consumer then has no redress. This order outlines the redress for that individual and I welcome it.
I welcome this order, particularly as it refers to the fact that its main emphasis is on those people who advertise in the advertisement columns of newspapers in the motor business. Lest anybody be under any illusions 90 per cent of these advertisements are placed by people who are actually full-time traders in motor cars, even though they might have two or three different phone numbers which they will use. In all cases they set themselves up as private individuals. In the past it has been virtually impossible to stop this type of business going on. It has had a tremendously detrimental effect on the legitimate motor trade. As Senator Conway said, legitimate motor traders have been registered for VAT, PAYE and PRSI. He mentioned that these other people are making a small fortune. It should be stated that anybody who went into the motor trade in the last number of years with a small fortune is now coming out bankrupt. If these people are able to make a small fortune out of it, they should be stopped.
We are bringing in legislation that is going to affect the trading of these people. What is the Department doing to ensure that there are enough people in the Department to monitor the situation? As a result of two orders coming in today, it would seem that we must have a number of extra inspectors to go around checking. Have the Department made provision for an inspectorate? We have seen too much legislation come in in this country over the last ten years — particularly consumer legislation — and there is no full-scale attempt to monitor it. I have seen attempts being made to monitor it in that two or three officials of a Department go down to a court in Kilkenny and spend two or three days over a court hearing, waiting for somebody to be charged with having put a farthing extra on a pound of sugar, or a halfpenny on a packet of briquettes. There is wasteful monitoring of that type where somebody is overcharging by a minimal amount and the cost to the State of pursuing these people is immense.
The only people who get anything out of these cases are the solicitors involved and the people from the Department who claim travelling and other expenses for waiting two or three days in court as witnesses in cases where a farthing or a halfpenny is involved. I totally agree with the sentiments behind this order. The onus is now on the Department to monitor the situation. I would have hoped that in regard to people who accept advertisements on a continuous basis from people who claim not to be traders but private individuals, there would be some way of getting at the newspapers for accepting such advertisements.
They are responsible.
It is not stated here. It is stated that it will not be necessary to have, in each advertisement, an explicit indication, but there seems to be nothing there which would place the onus on the newspaper to make certain that the person who is advertising with them is either a legitimate trader or a private individual. Perhaps it is there. I shall have to read it again.
In relation to the recurring matter raised by Senator Lanigan, article 2 of the order states:
Subject to paragraphs (2) and (3) of this Article, a person who supplies goods in the course of a trade, business or profession shall not publish or cause to be published an advertisement in relation to such supply unless it is reasonably clear from the advertisement that the goods are being supplied in the course of a trade, business or profession.
I believe that for the first offence the newspaper may have a defence on the grounds that they were unaware, but that explanation will not be accepted on a second occasion. So the newspaper itself is responsible if it publishes a misleading advertisement.
Should it not then be written into the order that this is the case? If it is not in the order, the newspaper would seem to have a defence unless there is a regulation under the Sale of Goods and Supply of Services Act whereby it could be got at.
My interpretation is that if a newspaper puts out an advertisement and they are satisfied that it is within the regulation, then they are responsible. Unless they are satisfied that the person advertising in the small advertisements section is a private individual, which is the principal factor, they must carry an additional advertisement to show that it is being presented by a person in the trade or profession. The words "shall not publish or cause to be published" give the legal authority that makes the paper responsible.
Is the person who advertises the person who shall not publish?
...person who supplies goods... shall not publish or cause to be published an advertisement...
seems to me to place the onus totally on the person who supplies the goods, the onus being on the person placing the advertisement. There does not seem to be anything there that would protect the consumer from an unscrupulous advertiser.
Again, Senator, my interpretation is that both the newspaper and the person putting in the advertisement are liable; until such time as the advertisement is properly inserted, the newspaper is also carrying responsibility. There is, I understand, provision that for the first offence in the case of a plea being made of not being fully aware, an exemption could be made, but subsequently that plea would no longer hold.
Could I come in quickly on this? This order tries to protect the consumer and it specifies the secondhand car business. I do not think there is any way that a newspaper can determine when an individual is working from a private address. If it is pointed out to the newspaper that that is the case and if this order covers it then the newspaper has an obligation to act on that. The newspaper would only become liable if it is proved that the newspaper, knowingly, puts a misleading advertisement in the paper. The emphasis, therefore, is on the person placing the advertisement with the newspaper. The newspaper and the person taking the advertisement could not know that this individual is carrying on against this particular order but if it is pointed out to the newspaper that that is the case then there is an argument and the newspaper then could be liable.
Two points were raised. On door-to-door sellers, if door-to-door traders publish any advertisement or even circulate a notice to householders the nature of these notices would have to be in order and they would have to show that they were traders and not individuals. On monitoring, the Director of Consumer Affairs will enforce this order and will have the assistance of Department inspectors. I am satisfied that this should work satisfactorily. I completely agree that there is no point in introducing an order if the necessary staff and resources are not available to monitor it and implement it. Section 22 of the Consumer Information Act states that the newspaper shall take all reasonable steps to ensure that the order is complied with. This defence will only work on one occasion. It is under the Consumer Information Act that this section is covered.
With regard to door-to-door advertisements would this order apply to, for example, tupperware parties? Families have been fleeced at them.
Anything that is written down and circulated would be regarded as an advertisement. If there is no advertisement there is no case.
Question put and agreed to.