Toyota Australia gives an undertaking to ACCC on ‘leather’ claims

12 February 2013

Toyota Motor Corporation Australia Limited (Toyota Australia) has given a court enforceable undertaking following an Australian Competition and Consumer Commission investigation into the use of ‘leather’ claims in the promotion of certain Toyota vehicles.

The ACCC found that from at least 2005 to 2009, Toyota Australia described the upholstery of certain vehicle interiors or components as ‘leather’, when in fact the upholstery was only partially leather. The vehicles known to Toyota Australia to have been affected are certain models within the Camry, Aurion, Prado and Kluger ranges.

“The ACCC was concerned that consumers were likely to have been misled by these claims. If consumers are prepared to pay a premium to have quality finishes for their car interiors, they are entitled to get what they paid for,” ACCC Chairman Rod Sims said.

The ACCC was also concerned that after 2009, several Toyota dealers represented to consumers that descriptions of vehicle interiors or components as ‘leather accents’ or ‘leather accented’ meant that the entire upholstery of the vehicle/component was made of leather, when at least some of them were not.

In giving an undertaking, Toyota Australia has admitted that it may have engaged in misleading conduct in breach of the Trade Practices Act 1974*. Toyota Australia has also recognised the ACCC’s concerns about the claims made in Toyota marketing material, as well as by Toyota dealers.

“Before making a claim about the composition of a product, businesses need to ensure that what they say does not risk misleading consumers. These practices affect consumers and competitors alike by creating an unfair advantage and will be taken very seriously by the ACCC,” Mr Sims said.

Toyota Australia has undertaken not to use the word ‘leather’ (without the word ‘accents’ or ‘accented’) in advertising to describe the upholstery of any vehicle component, unless it is able to demonstrate that the component is entirely upholstered in leather.

Toyota Australia has also undertaken to provide details of the leather, partial leather and non-leather interior components of vehicle interiors when using the expressions ‘leather accent’ or ‘leather accented’ in advertising.

As part of the undertaking, Toyota Australia will publish corrective notices and implement a supplementary trade practices compliance program, which includes the appointment of a compliance officer and a compliance advisor, training for Toyota Australia sales and marketing staff and dealers and a procedure for the review of product information materials.

Concerned consumers should refer to the list of relevant models on the Toyota Australia website and attached to the undertaking available on the ACCC’s website at http://www.accc.gov.au/content/index.phtml/itemId/1101384

*The Trade Practices Act 1974 was replaced by the Competition and Consumer Act 2010 from 1 January 2011.

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