Mazda Australia guilty of “misleading and deceptive conduct” – Federal Court
The Federal Court of Australia has found Mazda Australia engaged in “misleading and deceptive conduct” and made “false or misleading representations” to a number of new-car buyers about their rights under Australian Consumer Law.
The penalty for Mazda Australia will be set at a later date.
In the two most recent Federal Court cases involving car companies, Volkswagen AG was fined $125 million over its “dieselgate” scandal, while Ford was fined $10 million for not meeting its obligations under Australian Consumer Law.
The court action against Mazda was launched by the Australian Competition and Consumer Commission (ACCC) two years ago, after a number of 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.”
The ACCC alleged – and the Federal Court found – Mazda Australia “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, the ACCC said, 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,” said the ACCC.
In the ruling handed earlier this week, the Federal Court found “Mazda made 49 separate false or misleading representations relating to the nine consumers.”
Specifically, the Federal Court found Mazda misled these consumers “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.”
Mazda Australia was also taken to task for “representing that they were not entitled to a refund or replacement vehicle at no cost.”
Mazda Australia had previously 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 in October 2019.
In a media statement issued after this week’s Federal Court ruling, ACCC Chair Rod Sims – who has overseen a crackdown on the Australian car industry since 2015 – said: “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.”
Mr Sims added: “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.”
This week’s court action makes Mazda the seventh major automotive giant in seven years to come under notice by the ACCC.
And two brands – Volkswagen and General Motors – have come under notice by the ACCC on at least two occasions.
The ACCC launched an in-depth study into how some car companies and car dealers were routinely flouting Australian Consumer Law in 2016, after initially taking action against the Fiat-Chrysler-Jeep group of automotive brands in Australia in 2015.
“The message to the new car industry is clear, consumer rights are not negotiable and must not be misrepresented to consumers,” Mr Sims said in a media statement.
“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 Federal Court dismissed the ACCC’s allegations that Mazda had also engaged in “unconscionable conduct” in its dealings with these consumers,
However despite the Federal Court finding Mazda made “false or misleading representations” and gave the consumers “the run around” with “evasions and subterfuges,” the judge considered the conduct fell short of being unconscionable.
The ACCC says it will “carefully consider” the findings on unconscionable conduct.
Meantime, the Federal Court will decide on “penalties and other orders sought by the ACCC” at a later date, the consumer watchdog said.
As reported two years ago, the ACCC’s case against Mazda concerned seven vehicles – including Mazda 2, Mazda 6, Mazda CX-5, Mazda CX-5B, Mazda CX-3 and Mazda BT-50 – and 10 individual consumers.
MORE: Mazda taken to court for “false or misleading representations”
TIMELINE: How the ACCC has taken the car industry to task
Mazda Australia: Found guilty of “unconscionable conduct” and “misleading consumers,” fine to be determined (November 2021)
General Motors: Holden under ACCC spotlight after abandoning “lifetime” service deal (November 2021)
Volkswagen AG: Loses Australian High Court appeal over $125 million fine for “dieselgate” (November 2021)
Toyota Australia: Court-enforceable undertaking to meet obligations under consumer law (December 2020)
Volkswagen AG: Fined $125 million for “dieselgate” in Australia (December 2019)
Mazda Australia: Taken to court by the ACCC for “false and misleading representations” (October 2019)
Volkswagen Australia: Court-enforceable undertaking to meet obligations under consumer law (September 2018)
Ford Australia: Fined $10 million for “unconscionable conduct” (April 2018)
Hyundai Australia: Court-enforceable undertaking to meet obligations under consumer law (February 2018)
ACCC: Releases final report on Australian car retailing industry (December 2017)
Holden Australia: Court-enforceable undertaking to meet obligations under consumer law (August 2017)
ACCC: Releases draft report on Australian car retailing industry (August 2017)
ACCC: Launches investigation into Australian car retailing industry (June 2016)
Fiat, Chrysler, Jeep Australia: Court-enforceable undertaking to meet obligations under consumer law (September 2015)
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