ACCC appeals dismissal of Mazda unconscionable conduct allegations

14 April 2022

The ACCC has filed an appeal against the Federal Court’s decision to dismiss the ACCC’s allegations that Mazda Australia Pty Ltd engaged in unconscionable conduct.

In November 2021, the Court found that Mazda engaged in misleading and deceptive conduct and made false or misleading representations to nine consumers about their consumer guarantee rights, but dismissed the ACCC’s allegations that Mazda also engaged in unconscionable conduct in its dealings with the consumers.

“The case involved seven vehicles with serious and recurring faults. Six of them had engine replacements, including one vehicle which had three engine replacements. The consumers requested a refund or replacement vehicle from Mazda on multiple occasions, but these requests were denied,” ACCC Commissioner Liza Carver said.

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

“In addition to finding that Mazda made false or misleading representations, the Court found that Mazda gave consumers the “run-around” by engaging in evasion 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,” Ms Carver said.

“We will argue that based on the Court’s factual findings, Mazda’s conduct fell below the applicable norms of commercial behaviour, and was in all the circumstances unconscionable.”

Between 2017 and 2019, each of the affected consumers 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 Court found that Mazda repeatedly ignored or rejected the consumers’ requests, telling them the only available remedy was a repair. After repeated attempted repairs including engine replacements over months and years, in some cases Mazda eventually offered some consumers partial refunds, or a replacement vehicle but only if the consumer made a significant payment toward the vehicle.

“Mazda did not follow its own compliance policies in dealing with the consumers’ complaints, and sought to discourage consumers from pursing their right to a refund or a replacement vehicle,” Ms Carver said.

Background

The ACCC instituted proceedings against Mazda in October 2019. The Federal Court handed down its decision on 30 November 2021.

This case concerns seven vehicles and 9 individual consumers. Models include Mazda 2, Mazda 6, Mazda CX-5, Mazda CX-5B, Mazda CX-3 and Mazda BT-50 purchased between 2013 and 2017.

Consumer guarantees under the Australian Consumer Law provide remedies for consumers if their product is not of acceptable quality. Consumers can choose to have a product replaced, repaired or refunded if there is a major failure. There is a major failure if a product is not fit for purpose, cannot be fixed within a reasonable time, or is unsafe.

Since December 2020, multiple minor failures may together amount to a major failure.

The ACCC has previously accepted court-enforceable undertakings from Volkswagen, Holden, Hyundai and Toyota to improve their Australian Consumer Law compliance. In April 2018 the Federal Court found by consent that Ford engaged in unconscionable conduct in the way it dealt with complaints and ordered them to pay $10 million in penalties.

Further information on consumer guarantees is available at Consumer guarantees. The ACCC encourages consumers to use the complaint letter tool to email or write to a business in relation to their rights to a repair, replacement or refund.  

Release number: 
48/22
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Media enquiries: 
Media Team - 1300 138 917, media@accc.gov.au