Mazda Misled Consumers About Their Right to Have Faulty Cars Replaced, Federal Court Finds

Mazda Misled Consumers About Their Right to Have Faulty Cars Replaced, Federal Court Finds
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The Federal Court of Australia has on Tuesday found Mazda engaged in misleading and deceptive conduct, with the ruling determining the local arm of the motoring giant made false or misleading representations to a handful of consumers about their consumer guarantee rights.

A statement released by the ACCC detailing the ruling said Mazda Australia Pty Ltd made 49 separate false or misleading representations relating to the nine consumers.

The ACCC said after experiencing serious and recurring faults with their new Mazda vehicles within a year or two of purchase, the nine consumers had each requested a refund or a replacement vehicle from Mazda. According to the ACCC, Mazda ignored or rejected the consumers’ requests.

It is believed Mazda told the consumers the only available remedy was another repair, even though the consumers’ vehicles had already undergone multiple unsuccessful repair attempts, including complete engine replacements.

This case concerns seven vehicles and ten individual consumers. Models include Mazda 2, Mazda 6, Mazda CX-5, Mazda CX-5B, Mazda CX-3 and Mazda BT-50. Apparently, one vehicle actually had three engine replacements.

“After repeated attempted repairs, over months and even years, in some cases 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,” the ACCC explained.

In finding Mazda made those nearly 50 false or misleading representations, it found the company misled these consumers about their consumer guarantee rights by representing that they were only entitled to have their vehicles repaired. Under the Australian Consumer Law, a consumer’s rights include a refund or replacement when there is a major failure, however.

The Court also found that Mazda misled the consumers about their consumer guarantee rights by representing that they were not entitled to a refund or replacement vehicle at no cost (consumers do not have to make any financial contribution to receive the remedies that they are entitled to under the Australian Consumer Law).

“Mazda engaged in long, drawn out discussions with the consumers, often multiple times a day over months, in which it misled the consumers about their rights,” ACCC chair Rod Sims said. “Mazda’s conduct towards these consumers was not just appalling customer service as noted by the judge, it was a serious breach of the law.”

The ACCC instituted proceedings against Mazda in October 2019. And on Tuesday, Sims took the opportunity to deliver a message to the car industry.

“The message to the new car industry is clear, consumer rights are not negotiable and must not be misrepresented to consumers,” he said. “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.”

The Court dismissed the ACCC’s allegations that Mazda had also engaged in unconscionable conduct in its dealings with these consumers.

The ACCC said that despite finding that Mazda made false or misleading representations and gave the consumers “the run around” with evasions and subterfuges, the judge considered that the conduct fell short of being unconscionable.

The ACCC will carefully consider the findings on unconscionable conduct, it noted, and the Court will decide on penalties and other orders sought by the ACCC at a later date.