Private car park fines

Have private car parks shifted their focus from collecting fees to handing out dodgy fines?
 
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01 .Deceptive tactics

car-parking-lead

We take a look at private car parks and whether they've shifted their focus from collecting fees to handing out dodgy fines.

For at least the past five years, some private car park operators have been slapping motorists with bogus “fines” and threatening legal action if they don’t pay up. 

In the cases CHOICE has heard about, the operator gives no clear indication that a parking ticket is needed, and then sticks a $66 or $88 notice on vehicles that don’t display one. 

The confusing part for drivers is that the parking is generally free for an hour or two and there are no boom gates or ticket machines at the entrance – but you still need to display a ticket.

For more information about legal, see Shopping and legal.

Is it legal?

Should you be fined and fail to send off the cash, you can expect a threatening note on paper with a legal letterhead and an updated demand for about $170. According to Melbourne-based traffic court barrister Sean Hardy, “it is impossible for a private car park company to issue a fine. So the $88 claim is not a fine even though they try to make it look like one”. 

He confirmed that an earlier post on his online Victorian traffic law forum, pointing out that “private companies are never allowed to issue their own parking fines or enforce them in a court, so the company [instead] says it is claiming the money under a contract it has with the driver”, still holds true.

The NSW Roads and Maritime Service (RMS, formerly the RTA) also told CHOICE that “funds claimed by car park companies are not fines and we advise customers to seek professional advice” if they receive a demand for payment. Some car park operators are now using the term “liquidated damages” instead of “fine” in their collection notices, based on the premise that the motorist has entered a contract by using the car park. 

But Hardy says the contract argument is flimsy and that “even if the driver has entered into a contract with the car park company, the contract cannot lawfully claim a sum that is greater than the reasonable loss suffered by the company as a result of the breach of contract”. He estimates any reasonable loss to be less than $10.

Hardy believes the car park tactics are deceptive. 

“The number of consumers who receive a demand after parking at a ‘first hour free’ car park is high, and all of them say they are misled by the signs. If it’s mandatory for all drivers to display a ticket, why not have the ticket machine at the boom gate like legitimate car parks?”

Money maker

Despite the set-up being of questionable legality, it appears to be doing brisk business. In 2010-11, Consumer Affairs Victoria received 1615 inquiries and 270 complaints about private car park operators, and VicRoads was reportedly obliged by state courts to provide the details of about 70,000 car registrations so car park operators could mail out demands for payment. 

In July last year, the RTA appealed a NSW court order to provide names and addresses to private operator Care Park. The RTA lost the appeal but protested that it shouldn’t have been forced to surrender motorist details since, among other things, any legal action attempted by Care Park “would be doomed to fail”.

Still, the game goes on. In July this year one of the biggest operators, Australian National Car Parks (ANCP), was in court in Sydney attempting to obtain motorists’ names and addresses from the RMS. And earlier this year, in May, the RMS mailed a letter to ANCP and Care Park fine recipients warning that the agency had been ordered by the court to release their names and addresses. The letter provided a list of consumer protection agencies. Demand-for-payment notices threatening legal action have been sent out on behalf of ANCP under the name of Sydney-based solicitor Michael Roper. One letter we’ve seen adds an additional $85 fee to the original $88 payment for “liquidated damages”. 

It is CHOICE’s view that the almost doubling of the parking charge and the threat of legal action are excessive.

 
 

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Most people freak out and pay up when they get a letter from a lawyer, whether it’s legitimate or not... That’s just what the people behind these operations are counting on.
- Johnny Smithson

Johnny Smithson has become something of a consumer champion when it comes to dealing with potentially bogus parking fines. He became involved after a friend received a demand for payment and Smithson’s efforts to clear it up hit a brick wall, not least because the company didn’t even have a phone number. 

Since then he has established a website and says he’s fielded numerous emails from consumers who have received threatening collection letters. 

Smithson’s investigation has led him to believe that some private car park operations are now focusing more on debt collection than parking fees and teaming up with opportunistic lawyers in order to scare consumers into paying fines that may be illegitimate but which they’ll pay to avoid going to court. 

“Most people freak out and pay up when they get a letter from a lawyer, whether it’s legitimate or not,” he says. “That’s just what the people behind these operations are counting on.”

A tangled web

Are car parks, collection agencies and lawyers in on it together? CHOICE has confirmed that the phone number on an October 2011 letter from Michael Roper to a motorist currently leads to Australian Recovery and Collections (ARC). We were told by ARC that we “must be looking at an old notice” and were given Roper’s current phone number. We also obtained ASIC documents showing that ANCP and ARC currently have the same registered business address. 

The documents also show that ANCP’s two company directors, Paul Gyles and Victor Nudler, were directors of ARC from its foundation in February 2011 to July 2011 and that Gyles Holdings and Nudler Holdings still own 70% of ARC’s shares. ANCP and Roper did not return our calls.

Mounting fines

Russell De Leon has felt the full brunt of the private car park ticketing regime. He told CHOICE that the loading dock for his business is next to a Care Park in the Sydney suburb of Parramatta. 

“I frequently use my car to load items or deliver items for work, however I still managed to get fined for leaving my car in an area supposedly owned and operated by Care Park,” he says. “I recently received an envelope containing backdated fines since 2010 to the tune of $1584. 

Having contacted Care Park multiple times to organise an arrangement, I’ve been repeatedly told that their operators are busy and they’ll return my call. I’ve had no return calls for weeks now but have been sent statements demanding immediate payment or legal action will be taken.”

In 2010, Hong Lim, a member of Victoria’s state parliament representing Melbourne’s Clayton District, called for an investigation into the involvement of law firms in the private car park collection process, describing their tactics as part of “an old-fashioned shakedown for those who are unaware of their rights”. 

He called on the state attorney-general to investigate one firm, Parke Lawyers, to prevent people becoming victims of lawyers who prey on the “weak and ignorant”. He said that the firm, acting on behalf of Care Park, was threatening legal action unless the original $88 plus a $77 legal fee were paid.

A spokesperson for Lim’s office told us that legal action in such cases is unlikely, although the office continues to hear from concerned and confused citizens. (Parke Lawyers represented Care Park in their case against the RTA.) “One woman recently came in with a fine notice from [the Melbourne suburb of] Preston,” Hong Lim’s spokesperson said. 

“It turned out she’d never been to Preston. We called the car park operator and the fine was dropped, but when we pressed for more information they just hung up. If you challenge these operators they drop off straightaway. We generally tell our constituents to ignore the notices, but we still haven’t been able to shut these businesses down.”

The process of shutting them down, or at least reining them in, may be underway. In April this year, the Victorian Supreme Court ordered Ace Parking and its officers, Kevin John English and James John English, to stop using misleading tactics and fined the company $14,500. The tactics, which were found to violate the Fair Trading Act, included issuing fines and threatening legal action without legal authority, mimicking the look and language of legitimate council and government notices, and harassing people to pay.

What can you do?

The best way to respond is open to question at this point. Hardy believes Victorian motorists should ignore demands for payment. “I’ve never seen them sue a Victorian consumer. I have seen them sue consumers in NSW, but the case usually settles without a hearing because one or both parties realise it is uneconomical to maintain a court case over $88.”

In July this year, ANCP took three people to court in the Sydney suburb of Bankstown. Fair Trading NSW, which told us that 239 of the 265 private car park complaints it received in 2011-12 related to fines, says NSW consumers should contact car park operators to dispute fines and, if not satisfied, contact Fair Trading on 13 32 20 or lodge a complaint at fairtrading.nsw.gov.au. A spokesperson for NSW Fair Trading said consumer regulators are monitoring a number of car park operators and that Consumer Affairs Victoria “is leading work on a national approach to this matter”.

ANCP will only accept payment disputes in writing or by fax and asks for any evidence you may be able to provide relating to the fine. One consumer who has pursued a thorough investigation of his own says that because many of these car parks are attached to shops, consumers should contact the businesses that the car park appears to serve (if there is one), since the ticketing system is ostensibly designed to prevent motorists who aren’t patronising the business from parking there.

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