MIL-OSI Australia: Mazda misled consumers about their rights over refund or replacement for faulty cars

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Source: Australian Competition and Consumer Commission

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.

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.

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, the Court 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.

The Court 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 Mr Sims said.

“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,” Mr Sims said.

“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.”

The Court dismissed the ACCC’s allegations that Mazda had also engaged in unconscionable conduct in its dealings with these consumers. Despite finding that Mazda made false or misleading representations and gave the consumers “the run around” with evasions and subterfuges, the judge considered that the conduct fell short of being unconscionable. 

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.

Background

The ACCC instituted proceedings against Mazda in October 2019.

This case concerns seven vehicles and ten individual consumers. Models include Mazda 2, Mazda 6, Mazda CX-5, Mazda CX-5B, Mazda CX-3 and Mazda BT-50.

Consumer guarantees under the Australian Consumer Law provide remedies for consumers if their product is not of acceptable quality. Consumers can choose to have a product replaced, repaired or refunded if there is a major failure. There is a major failure if a product is not fit for purpose, cannot be fixed within a reasonable time, or is unsafe.

The ACCC has previously accepted court-enforceable undertakings from Volkswagen, Holden and Hyundai 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.

Further information on consumer guarantees is available at Consumer guarantees. The ACCC encourages consumers to use the complaint letter tool to email or write to a business in relation to their rights to a repair, replacement or refund.  

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