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Malcolm McDonald knows a bargain when it comes to excavators. He has been buying and trading them through his company, McDonald Construction, for a long time. BY ALAN TITCHALL After some intense bidding on online auction website TradeMe, Malcolm McDonald was the lucky owner of a relatively new three tonne digger worth around $25,000 but which only cost him $16,300 including freight.It turned out that the digger wasn’t quite suitable for his needs so he on-sold it, for a small profit, to Mainline Commercial & Industrial. This was a dealer and he had built up a close and rewarding relationship with a number of sales and trades over a 10-year period. That was until police arrived to confiscate the machine that, by now, Mainline had already sold to another client. McDonald’s bargain had been stolen, along with other contracting gear to a total of around $250,000, say police, and the digger actually belonged to Porter Hire. The person accused of the theft, who is facing five accounts of burglary and 12 charges of theft, was still awaiting trial at the time Contractor went to press. Highly embarrassed and out of pocket, McDonald and Mainline Commercial have held on to their close commercial relationship, and the contractor who lost the digger was offered a cash settlement or another machine, but all parties are now preaching the same advice: Buyer beware! “We are lucky it wasn’t a $100,000 piece of machinery,” reflects McDonald. “I’ve bought a lot of things on TradeMe in the past – vintage bikes, utes and even excavators – and had no problems, but as a auction house I think it needs to tighten up its act.” Even though the transaction payment had gone through company accounts and standard checks had been made on any outstanding monies owed on the machine, there had been no way to guarantee title of ownership, or even view it. The seller even had hundreds of ‘positive’ sales to support their TradeMe profile and, when conversing over the phone, “talked the construction talk,” says Malcolm. “Don’t buy secondhand machines unless you can view the piece and get a statement and guarantee of ownership,” he warns. “We have been in this business for 45 years and have never experienced anything like it,” says a spokesman for Mainline Commercial & Industrial, who was the one left out of pocket over the incident. “If the digger had been bought through an action house, such as Turners, we would have been given clear title and unencumbered ownership.” Online auctions – who’s responsible? Auctions come under the Ministry of Economic Development and an act that predates online sales by around 70 years. Internet auctions are not covered by the Auctions Act as they are deemed to be involved in open tendering process. Nor are such competitive tenders covered by the Consumer Guarantees Act unless, in the case of TradeMe, you buy at the ‘buy now’ price. Traders on the internet must also comply with the Fair Trading Act. “We are classified as a publisher,” explains TradeMe business manager Michael O’Donnell. “Like newspapers, we can’t vet ownership, but we keep an archive of every transaction with all details, including the seller’s details to IP addresses and banking details.” O’Donnell adds that the company is “very proactive” when it comes to pursing complaints and prosecutions. It has a team of 30 staff in customer services and ‘trust and safety’, headed by a former policeman, to monitor transactions. Each listing has a sheriff’s badge on the bottom where viewers can alert TradeMe to what could be dodgy dealing. “Customer services receive around 6000 such emails a week to check and, if they are suspicious, pass onto the trust and safety team,” he says. “We have prosecuted over 40 people so far, working closely with the Police and IRD. You would have to be a right mug to sell hot gear this way.” Thwarting machinery theft In the absence of a national registry of machine ownership – an onerous and costly task for any body – proving ownership of machinery will never be easy. Ken Reilly, the North Island general manager for Porter Hire, one of the largest earth moving hire companies in the Southern Hemisphere, says it falls on the contractor to safeguard and insure hired equipment against theft. There are after-market security systems, such as hydraulic locks and GPS monitoring devices but, says Reilly, when you are dealing with so many diggers, the scale is impractical. “We are dealing with so many clients, it would be too easy to lose keys and security numbers. These systems are OK when you have two or three machines, but when you are dealing with thousands, the cost is simply prohibitive.” He says commonsense security measures such as temporary compounds go a long way in controlling onsite thefts and repeats the ‘buyer beware’ message when it comes to secondhand sales. “It’s not smart to trade online with some Willy Wonker when you can go to a reputable dealer and have ownership and the purchase guaranteed.” Contractor Vol.31 No.6 July 2007 |