Car industry on notice as Mazda faces court

Written on the 31 October 2019 by Business News Australia

Car industry on notice as Mazda faces court

Car manufacturer Mazda's Australian arm will face the Federal Court over allegations of unconscionable conduct and misleading statements in relation to faulty cars.

As alleged by the Australian Competition and Consumer Commission (ACCC), Mazda engaged in unconscionable conduct and made false representations in its dealings with customers who bought one of seven new Mazda vehicles between 2013 and 2017.

The case revolves around seven cars purchased by individual consumers, with models including the Mazda 2, Mazda 6, Mazda CX-5B, Mazda CX-3 and the Mazda BT-50.

The ACCC alleges that these seven consumers who bought the cars began experiencing faults with their vehicles within a year or two from purchase.

The faults affected the ability of consumers to use their vehicles, and in some cases saw the cars unexpectedly losing power and decelerating while they were being driven.

Affected customers took these cars to repairs a number of times, in many cases having their entire engine replaced. One car was off the road for four months within a six-month period.

"We allege that 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," says ACCC Chair Rod Sims.

"In short, our case is that Mazda gave these consumers the 'run around' while denying their consumer guarantee rights."

The ACCC further alleges that customers were forced to contact Mazda a number of times over periods extending to multiple years.

These customers requested refunds or replacement vehicles from Mazda but were refused.

"We allege that Mazda told these consumers that their only available remedy was yet another repair," says 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 the consumers to accept offers that were less than what they were entitled to, including offering to refund only a portion of the car's purchase price, or to only provide a replacement car if the consumer made a significant payment.

In one case, Mazda's offer was limited to an extended warranty and free service of the vehicle.

"Consumers do not have to make any financial contribution to receive the remedies they are entitled to under the Australian Consumer Law," says Sims.

"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."

"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."

The ACCC is seeking penalties, declarations, injunctions, consumer redress, a publication order, an order requiring the implementation of a compliance program and costs.

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