The Federal Court has ordered Mazda Australia to pay $11.5 million in penalties for engaging in misleading and deceptive conduct, as well as making false or misleading representations to nine consumers about their consumer guarantee rights.
According to the ACCC which instituted the proceedings, Mazda made 49 separate false or misleading representations to nine consumers who experienced recurring and serious faults with their vehicles within two years of purchase.
The ACCC said Mazda ignored or rejected requests by the consumers for a refund or a replacement vehicle. The company told them that the only remedy available was a repair, even though the vehicles had undergone multiple unsuccessful repair attempts including complete engine replacements. One vehicle had three engine replacements.
Ultimately, Mazda offered to refund only a portion of the vehicle’s purchase price, or a replacement vehicle only if the consumer made a significant payment, after multiple failed repair attempts.
“All of the consumers were given the ‘run-around’ by Mazda while it engaged in evasions and subterfuges, provided appalling customer service and failed to make any genuine attempt to consider and apply the consumer guarantee provisions of the Australian Consumer Law,” said Catriona Lowe, Deputy Chair of the ACCC.
“The message to the new car industry is clear – substantial penalties can be imposed on businesses which misrepresent consumer guarantee rights.”
“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 we expect car manufacturers to honour those rights promptly and without misleading consumers,” said Lowe.
The court also ordered Mazda to pay $82,000 in compensation to some of the consumers. Mazda consented to the order and undertook to pay a further $3,000 in compensation per vehicle.
“We are very pleased that the court has ordered compensation for the consumers who had not received a full refund or replacement vehicle from Mazda,” said Lowe.
Mazda was also ordered to implement an Australian Consumer Law compliance programme, publish a corrective notice on its website, notify dealers of the court’s findings and pay a contribution to the ACCC’s costs.