One of Australia’s most popular car brands has found itself in hot water after misleading customers about their right to a refund or replacement vehicle.
Car maker Mazda misled customers about their rights to refunds and replacements for their faulty vehicles, the Federal Court has found.
The court found that the manufacturer engaged in misleading and deceptive conduct when dealing with nine customers over problems with their vehicles.
The customers had requested either refunds or replacements vehicle after experiencing continuing problems with their cars in the first year or two of ownership.
But the court found that Mazda had ignored or rejected the requests, telling owners the only remedy was further repairs, despite continuing problems. One customer’s car had its engine replaced three times.
Australian Competition and Consumer Commission (ACCC) chairman Rod Simms said the maker engaged in long, drawn out negotiations with customers, misleading them about their rights to a refund or replacement vehicle.
“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,” Mr Simms said.
“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.”
The court found that after repeated attempted repairs, Mazda in some cases 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.
It found the maker had made 49 separate false or misleading representations relating to the nine consumers.
Under Australian Consumer Law, customers are entitled to a refund or replacement vehicle when there is a major failure, but the court said Mazda had told owners they were only entitled to a repair.
The Court also found Mazda had misled the consumers by telling them they weren’t entitled to a replacement vehicle at no cost.
The ACCC had also alleged that Mazda’s conduct was unconscionable, but the court rejected those claims. In a statement the ACCC would “carefully consider the findings on unconscionable conduct”.
The Court will decide on penalties at a later date.
The legal battle between the ACCC and Mazda began in October 2019 and revolved around several different models including the popular CX-3 and CX-5 SUVs, the BT-50 ute, the Mazda6 sedan and the Mazda2 hatchback.
The ACCC said consumers could choose to have a product replaced, repaired or refunded if there was a major failure that could not be fixed within a reasonable time. Consumers could also take action if a product was deemed not fit for purpose or is unsafe.
The court battle is the latest in a series of disputes between the ACCC and major car makers.
In 2019, a judge fined Volkswagen a record $125 million for selling diesel vehicles with “cheat devices” aimed at evading CO2 emissions laws.
Volkswagen unsuccessfully appealed the decision.
The ACCC has also previously accepted court-enforceable undertakings from Volkswagen, Holden and Hyundai to improve their compliance with Australian Consumer Law.
Ford was ordered to pay $10 million in April 2018 for engaging in “unconscionable conduct” when dealing with complaints about its troubled dual-clutch transmission.
Mazda said in a statement it had received the judgement and was “taking it into careful consideration”.
“We will not be commenting further at this time,” the company said.
Originally published as Federal Court finds Mazda misled consumers about their rights
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