Federal Court set to hand down fines to Japanese manufacturer for ignoring or rejecting consumer requests
UPDATED 23/03/2023: A long-running legal battle between Mazda Australia and the Australian Competition and Consumer Commission (ACCC) is continuing to drag on through the courts, with the Full Federal Court today dismissing appeals by both the car-maker and the consumer watchdog.
The appeals were lodged after a 2021 judgement which found that Mazda had engaged in “misleading and deceptive conduct” in its dealings with consumers, but not “unconscionable conduct” as the ACCC alleged (see original story below).
Today, the Full Federal Court dismissed the ACCC’s appeal over the alleged unconscionable conduct, but also dismissed Mazda’s appeal against the decision that it had made false representations to consumers about their rights.
The ACCC said the case will now be referred back to the trial judge, for a hearing at a later date on the penalties and other orders the commission has sought.
“We appealed this case because we believe that it is not acceptable business practice for businesses to give consumers the ‘run around’ and discourage consumers from pursuing their rights for a refund or replacement vehicle,” ACCC Commissioner Liza Carver said in a statement.
In a statement, Mazda Australia said: “Mazda is pleased that the Federal Court by majority has upheld Justice O’Callaghan’s finding that it did not engage in unconscionable conduct. This decision is an acknowledgment that Mazda acted within the law and that Mazda was, and remains, committed to ensuring that its customers are treated fairly within the law.
“We are disappointed that the court upheld Justice O’Callaghan’s finding that it engaged in misleading conduct and are carefully reviewing the court’s decision in that regard.”
ORIGINAL ARTICLE PUBLISHED 3/12/2021: Mazda Australia is set to be handed a hefty fine over “false or misleading representations” to numerous Australian new-car buyers about their rights under Australian Consumer Law.
In a ruling handed down this week, the Australian Federal Court found the Japanese car-maker’s local arm engaged in “misleading and deceptive conduct” in a case brought by the Australian Competition and Consumer Commission (ACCC) on behalf of Australian customers.
The consumer watchdog launched the action two years after numerous customers “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” in October 2019.
The Court found that Mazda made 49 separate false or misleading representations in total relating to nine consumers.
Affected models included the Mazda2, Mazda6, Mazda CX-5, Mazda CX-5B, Mazda CX-3 and Mazda BT-50.
Separately, the Court dismissed the ACCC’s allegations that Mazda also engaged in unconscionable conduct in its dealings.
It said that Mazda ignored or rejected 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.
According to the ACCC, one customer’s 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 ACCC statement reads.
“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.”
ACCC chair Rod Sims said Mazda engaged in long, drawn-out discussions with customers over many months, in which it misled the consumers about their rights.
“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,” 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.”
carsales has sought comment from Mazda Australia.
The Federal Court will decide on penalties and other orders sought by the ACCC at a later date.
In the two most recent Federal Court cases involving car companies not meeting their obligations under Australian Consumer Law, fines have run into the tens of millions of dollars.
Keyword: Mazda Australia found to have misled customers