Mazda Australia is being taken to Federal Court by Australia’s peak consumer watchdog for allegedly engaging in “unconscionable conduct” and making “false or misleading representations in its dealings with consumers” who bought new cars between 2013 and 2017.
Mazda is the fifth major car company to be taken to task by the Australian Competition and Consumer Commission (ACCC) in the past four years. The rest of the industry remains under the spotlight and further action is likely.
The ACCC alleges consumers began experiencing faults with new Mazda vehicles within a year or two of purchase.
“The faults affected the ability of the consumers to use their vehicles; and in some cases, included the vehicles unexpectedly losing power and decelerating while they were being driven,” said a statement from the ACCC.
“The vehicles were taken to Mazda dealers for repeated repairs, including multiple engine replacements. One vehicle was off the road for four months within a six month period.”
ACCC Chair Rod Sims alleges Mazda “repeatedly refused to provide a refund or a replacement at no cost to the consumers and pressured them to accept lesser offers which were made by Mazda only after multiple failures of the vehicles and repeated attempted repairs”.
“In short, our case is that Mazda gave these consumers the ‘run around’ while denying their consumer guarantee rights,” said Mr Sims in a media statement.
Mazda Australia said the company “consistently exceeds its legal obligations” and regularly ranks at or near the top of consumer satisfaction surveys.
“(Mazda) is, therefore, disappointed that the ACCC has chosen to commence legal proceedings against it for alleged breaches of the Australian Consumer Law. Those proceedings will be vigorously defended,” said a statement from Mazda.
The ACCC alleges consumers were forced to contact Mazda multiple times over months or years as they continued to experience the faults with their vehicles.
“The consumers requested a refund or replacement vehicle from Mazda on multiple occasions, but these requests were denied,” said the ACCC’s media statement.
“Despite the consumers repeatedly asking Mazda for a refund or replacement vehicle, and enduring multiple unsuccessful repair attempts, we allege that Mazda told these consumers that their only available remedy was yet another repair,” said Mr Sims.
“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, and manufacturers cannot refuse these claims.”
The ACCC alleges that after repeated attempted repairs “Mazda pressured consumers to accept offers that were less than what they were entitled to”.
“Mazda offered to refund only a portion of the car’s purchase price, or offered to provide a replacement car if the consumer made a significant payment,” said the ACCC statement. “In one case, Mazda’s offer was limited to an extended warranty and free service of the vehicle.”
Mr Sims made it clear that under Australian Consumer Law car buyers “do not have to make any financial contribution to receive the remedies they are entitled to”.
“The ACCC remains alarmed about the barrage of issues consumers face when they attempt to exercise their consumer rights because there is a problem with a new vehicle they have purchased,” said Mr Sims.
“The new car industry is squarely on notice of our concerns. We will continue to take action against vehicle manufacturers and suppliers that fail to provide remedies to consumers who are entitled to them especially those who have bought vehicles with major failures,” he said.
The ACCC is seeking “penalties, declarations, injunctions, consumer redress, a publication order, an order requiring the implementation of a compliance program and costs”, the statement said.
Mazda is fifth automotive brand in four years to attract attention from the ACCC.
Ford was fined $10 million in April 2018 (at the time, one of the largest fiscal penalties in Australia), also for “unconscionable conduct”, over how it initially failed to properly deal with car complaints.
In August 2017 Holden also signed a court enforceable undertaking to comply with consumer guarantees after Holden admitted it misrepresented to consumers it had discretion to decide whether the vehicle owner was entitled to a remedy free of charge.
In September 2015 the company that imports Chrysler, Jeep, Fiat and Alfa Romeo vehicles provided an administrative undertaking to the ACCC to establish a consumer redress program, and to review its handling of previous complaints.