The Federal Court has ordered Mazda Australia Pty Ltd pay $11.5 million in penalties for engaging in misleading and deceptive conduct and making false or misleading representations to nine consumers about their consumer guarantee rights.
Mazda made 49 separate false or misleading representations to the nine consumers who had experienced recurring and serious faults with their Mazda vehicles within two years of purchase.
Mazda ignored or rejected requests by the nine consumers for a refund or a replacement vehicle. It told them that the only remedy available was a repair, even though their vehicles had already 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 offered 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,” ACCC Deputy Chair Catriona Lowe said.
“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,” Ms Lowe said.
The Court also ordered Mazda to pay a total of $82,000 in compensation to some of the consumers. Mazda consented to this order, and has undertaken 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.”
Mazda was also ordered to implement an Australian Consumer Law compliance program, publish a corrective notice on its website, notify dealers of the Court’s findings and pay a contribution to the ACCC’s costs.
Background
The ACCC instituted proceedings against Mazda in October 2019. The Federal Court handed down its decision on 30 November 2021, finding, Mazda had engaged in misleading and deceptive conduct and made false or misleading representations to nine consumers about their consumer guarantee rights. The Court dismissed the ACCC’s allegations that Mazda had engaged in unconscionable conduct in its dealings with the consumers.
The ACCC appealed against the Federal Court’s decision to dismiss the ACCC’s allegations that Mazda had engaged in unconscionable conduct on 14 April 2022. The ACCC’s appeal was dismissed on 23 March 2023.
Mazda appealed against the Federal Court’s decision that it had made 49 false or misleading representations to consumers. Mazda’s appeal was dismissed on 23 March 2023.
This case concerned seven vehicles and nine individual consumers. Models involved included 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 the product they purchase is not fit for purpose or 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, the Australian Consumer Law now provides that multiple minor failures may together amount to a major failure.
Further information on consumer guarantees is available at Consumer guarantees.