ACCC takes action against Ford

26 July 2017

The ACCC has instituted proceedings against Ford Motor Company of Australia Limited (Ford) alleging that it engaged in unconscionable and misleading or deceptive conduct, and made false or misleading representations in its response to customer complaints.

The customer complaints were about Ford’s Focus, Fiesta and EcoSport vehicles supplied in Australia between 2011 and 2016, which featured a type of transmission known as PowerShift Transmission (PST).

The ACCC alleges that about half of the 70,000 vehicles sold had at least one repair relating to the PST. Customers made complaints to Ford and its dealers about their car’s excessive shuddering and jerking when accelerating, loss of gear selection and sudden loss of power and/or excessive noisiness from the PST.

From 2011 to May 2015, Ford allegedly refused to provide a refund or replacement vehicle to consumers, even after vehicles had undergone multiple repairs that had not fixed the issue. In most cases, Ford only provided replacement vehicles in accordance with its “PowerShift Ownership Loyalty Program”, which required consumers to make a significant payment towards a replacement vehicle. 

“The ACCC alleges that Ford misrepresented to customers who made complaints that the issues with their vehicles were caused by the way the driver handled the vehicle, even though Ford was aware of systemic issues with the vehicles from at least 2013,” ACCC Chairman Rod Sims said.

It is also alleged that in most cases Ford refused to provide a refund or a replacement vehicle unless customers participated in the Powershift Ownership Loyalty Program by making a substantial payment for a replacement vehicle, which was on average $7,000. As a result, customers who could not afford to make these payments felt that they had no option but to continue to use their vehicles.

“The ACCC alleges that Ford’s conduct towards customers who had complained of issues with their vehicles was unconscionable. It is also alleged that Ford then on-sold vehicles surrendered as part of the Powershift Ownership Loyalty Program to wholesalers and customers, without disclosing the systemic or specific issues experienced with those vehicles,” Mr Sims said. 

“The ACCC is alarmed about the level of non-compliance with the Australian Consumer Law in the new car industry, which has been laid bare in our new car retailing market study due out next month. Cars are the second-most expensive purchase most consumers will ever make and if they fail to meet a consumer guarantee, people are automatically entitled to a remedy.”

“The ACCC urges all vehicle manufacturers to ensure their complaints handling processes provide the remedies that consumers are entitled to get under the Australian Consumer Law or, like Ford, they will find themselves in court,” Mr Sims said.

The ACCC is seeking declarations, injunctions, pecuniary penalties, consumer redress orders, corrective advertising, and compliance program obligations.

Further information on consumer guarantees is available at https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees

Use our Letter of Demand tool if you are having trouble exercising your consumer guarantee rights.

Release number: 
MR 121/17
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