Vehicle parts seller to pay $26,000 for operating a ‘Ponzi scheme’ business

A man who operated a business selling specialist motor vehicle parts as well as conducting driver training courses was fined $10,000 by the Armadale Magistrates Court on 31 July 2020 and ordered to pay compensation to his disappointed customers amounting to $16,003.

Gordon German, trading as Green Oval Experience formerly operating in Canning Vale, was also ordered to pay costs of $225.90. Mr German pleaded guilty to accepting deposits from seven consumers for specialist alloy wheels for Land Rover vehicles and the training courses between May 2017 and November 2018, but failed to deliver the goods or services and did not provide a refund.

The compensation orders were made in favour of six consumers:

  • $520 to a Murray Town SA consumer who had paid for a two-day drive course;
  • $3,510 to a Queanbeyan East NSW consumer who had ordered six wheel rims;
  • $3,871 to a Clarence Park SA consumer who had ordered six wheel rims and an emergency inflation kit;
  • $3,510 to a Fassifern NSW consumer who had ordered six wheel rims;
  • $1,397 to an Innaloo WA consumer who had ordered a set of rock sliders, one compressor plate as well as an information seminar; and
  • $3,195 to a Fairfield VIC consumer who had ordered five wheel rims and one compressor plate.

Another consumer from West Perth WA paid $3,785 for five wheel rims which were not supplied. The consumer took separate civil court action and was granted a compensation order by another court.

Appearing before Magistrate Malley, Mr German stated his actions were not intentional and he did manage to pay the majority of other customers. However, His Honour likened Mr German’s business to a ‘Ponzi scheme’.

Commissioner for Consumer Protection Lanie Chopping said businesses need to ensure they are able to deliver goods or services before accepting deposits or full payments from consumers.

“In this case, Mr German’s business was impacted by the fact that the specialist parts could only be supplied from Britain and his cash flow was affected by fluctuations in the value of foreign currency,” Ms Chopping said.

“Nevertheless, there is no excuse for taking money from people when you know that you may not be able to deliver and such behaviour attracts negative online reviews and comments which only makes matters worse for the trader.

“Consumers also need to reduce their risk in these circumstances by ensuring they do not pay too much upfront.”

A public warning against Mr German was issued by Consumer Protection in September 2019: Consumers pay for motor vehicle parts that are not delivered (Gordon German / Green Oval Experience).

Consumers who don’t get what they pay for can lodge a complaint on the Consumer Protection website

/Public Release. The material in this public release comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.