Toyota undertakes to improve consumer guarantees compliance

2 December 2020

The ACCC has accepted a court-enforceable undertaking from Toyota Motor Corporation Australia Limited to take a number of steps to review and improve its compliance processes in relation to the Australian Consumer Law consumer guarantees.

Toyota has acknowledged the ACCC’s concerns that consumers can be misled about how their consumer guarantee rights under the Australian Consumer Law interact with manufacturer’s warranties. Toyota acknowledged that internal processes should be maintained that ensure consumers are informed of, and able to easily access, their legal rights under the consumer guarantees.

Toyota also acknowledged the ACCC’s concerns that failure to inform consumers regarding mechanical issues with their vehicles (or issues with repairs) may be misleading.  

“We received a number of complaints about Toyota’s approach to consumers experiencing issues with the Diesel Particulate Filter (DPF) in their vehicles,” ACCC Commissioner Sarah Court said.

Between 2016 and 2018, many consumers experienced issues with the DPF in their vehicles. This included the emission of white smoke from the vehicle and soot accumulation in the DPF resulting in the display of warning messages and some vehicles entering ‘limp mode’ to encourage the driver to seek assistance. 

Consumers were instructed to take their vehicles to a Toyota dealer for repair under warranty but the ACCC received complaints about vehicles being repaired on multiple occasions without remedying the DPF issues.

From June 2018, Toyota Australia progressively implemented measures, including software updates that significantly reduced the occurrence of DPF issues in new vehicles. These measures were rolled out to existing vehicles from October 2018.  

Toyota has also implemented a review of, and improvements to, its Consumer Law Compliance Program and provided Consumer Law compliance training to relevant Toyota Australia staff and Toyota Dealers.

In 2019, Toyota Australia established a DPF consumer redress program to review requests for refunds and replacement vehicles made by consumers who experienced DPF issues.

“Toyota has now undertaken to review its systems and procedures for customer complaint handling, to ensure consumers are able to access a refund or replacement vehicle where there has been a major failure,” Ms Court said.

“The ACCC continues to prioritise work in the new car retailing sector and we are pleased Toyota customers will now benefit from a better approach in terms of being informed about, and exercising, their consumer guarantee rights.”

“All businesses, including car manufacturers, are reminded that consumer law rights cannot be excluded, restricted or modified. Express warranties operate in addition to consumer guarantees, not instead of these statutory guarantees,” Ms Court said.

Toyota has also undertaken to inform consumers purchasing a new Toyota vehicle of their consumer guarantee rights and to update its existing Vehicle Identification lookup service to allow consumers to access details of repairs or updates carried out by Toyota dealers relevant to their vehicle.

A copy of the undertaking can be found at: Toyota Motor Corporation Australia Limited

Background:

Between June 2015 and June 2018, Toyota Australia supplied vehicles fitted with 2.4L or 2.8L diesel engines to Australian consumers. These vehicles were fitted with a Diesel Particulate Filter designed to capture particulate matter and transform it into carbon dioxide and water vapour through a process referred to as regeneration.

The ACCC has previously accepted court-enforceable undertakings from Volkswagen, Holden and Hyundai to improve their Australian Consumer Law compliance.

In April 2018 the Federal Court found Ford engaged in unconscionable conduct in the way it dealt with complaints and ordered them to pay $10 million in penalties.

In October 2019 the ACCC instituted proceedings against Mazda alleging unconscionable conduct and false or misleading representations in its dealings with consumers.

Release number: 
251/20
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