The Federal Court has found that Mazda Australia Pty Ltd engaged in misleading and deceptive conduct and made false or misleading representations to nine consumers about their consumer guarantee rights.
But it has dismissed the Australian Competition and Consumer Commission’s (ACCC) allegations that Mazda had also engaged in unconscionable conduct in its dealings with these consumers.
In spite of finding that Mazda gave the consumers “the run around” with evasions and subterfuges, the judge considered that the conduct fell short of being unconscionable.
The ACCC instituted proceedings against Mazda in October 2019 in a case concerning seven Mazda vehicles and ten individual consumers.
The consumers had each requested a refund or a replacement vehicle from Mazda, after experiencing serious and recurring faults with their new Mazda vehicles within a year or two of purchase.
It claims Mazda ignored or rejected the consumers’ requests, telling them the only available remedy was another repair, even though the consumers’ vehicles had already undergone multiple unsuccessful repair attempts, including complete engine replacements. One vehicle had three engine replacements.
After repeated attempted repairs, over months and even years, in some cases Mazda offered to refund only a portion of the vehicle’s purchase price, or offered a replacement vehicle only if the consumer made a significant payment.
The Court found that Mazda made 49 separate false or misleading representations relating to the nine consumers.
Specifically, it found that Mazda misled these consumers about their consumer guarantee rights by representing that they were only entitled to have their vehicles repaired, even though a consumer’s rights under the Australian Consumer Law also include a refund or replacement when there is a major failure.
It also found that Mazda misled the consumers about their consumer guarantee rights by representing that they were not entitled to a refund or replacement vehicle at no cost, when in fact consumers do not have to make any financial contribution to receive the remedies that they are entitled to under the Australian Consumer Law.
“Mazda engaged in long, drawn out discussions with the consumers, often multiple times a day over months, in which it misled the consumers about their rights,” ACCC chair Rod Sims says.
“Mazda’s conduct towards these consumers was not just appalling customer service as noted by the judge, it was a serious breach of the law.
“The message to the new car industry is clear, consumer rights are not negotiable and must not be misrepresented to consumers.
“If a vehicle cannot be repaired within a reasonable time, or at all, consumers have a right under the Australian Consumer Law to a refund or replacement,” he says.
The ACCC will carefully consider the findings on unconscionable conduct.
The Court will decide on penalties and other orders sought by the ACCC at a later date.
The ACCC has previously accepted court-enforceable undertakings from Volkswagen, Holden, Hyundai and Toyota to improve their Australian Consumer Law compliance. In April 2018 the Federal Court found by consent that Ford engaged in unconscionable conduct in the way it dealt with complaints and ordered them to pay $10 million in penalties.
