The Australian Competition and Consumer Commission (ACCC) has initiated legal proceedings against Grays eCommerce Group and is pushing for a $10 million penalty over allegations the Australia-wide online auction business provided false or misleading descriptions of hundreds of cars on its site.

The regulatory watchdog has alleged the group included incorrect information about the make, model, features, and undisclosed obvious faults. At least 750 consumers bought a car from Grays which was incorrectly described, leading to potential financial losses or inconvenience. Examples of misleading car descriptions included incorrect manufacturing year or transmission system, listing features that the actual car did not have, or failure to mention obvious faults.

Grays has since admitted to engaging in misleading or deceptive conduct and making false or misleading representations between 1 July 2020 and 30 June 2022, and will make joint submissions with the ACCC to the Federal Court that it should pay a $10 million penalty for the breaches of the Australian Consumer Law.

"At least 750 consumers bought a car from Grays which was incorrectly described. 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," said ACCC Commissioner Liza Carver.

"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."

Grays has already contacted some affected consumers to offer redress and the ACCC has accepted a court-enforceable undertaking from Grays to provide redress to affected consumers. The undertaking will commence once final orders are made by the Court.

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