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Mazda pays up for misleading customers

Court orders Mazda Australia to pay $11.5 million for misleading its customers

15 Feb 2024

MAZDA Australia has been ordered to pay $11.5 million for misleading customers with faulty vehicles about their consumer rights.


The Federal Court found the importer had made 49 individual false or misleading representations to nine customers over seven vehicles known to be experiencing serious and/or recurring faults within two years of purchase.


It was further found that Mazda Australia ignored or rejected requests by those customers for a refund or replacement vehicle, instead insisting the only course of action was for the vehicles to be repaired.


The affected customers told the Federal Court that their vehicles had already undergone a series of unsuccessful repairs – including engine replacements.


In one instance an engine was exchanged three times before Mazda Australia agreed to refund a portion of the vehicle’s value – but only if the customer made a significant financial contribution.


It is understood the affected vehicles included Mazda2, Mazda6, CX-5, CX-8 and BT-50 models purchased between 2013 and 2017.


According to the Australian Competition and Consumer Commission (ACCC) deputy chairperson Catriona Lowe, Mazda Australia had given its customers the “run-around” while providing “appalling” service and engaging in evasion and subterfuge.


“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 customers,” she said.


“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.”


The Federal Court ordered Mazda Australia pay $11.5 million in penalties after its appeal against a prior ruling was dismissed last year.


Mazda Australia was further ordered to pay an additional $82,000 in compensation to some of the consumers affected, to implement a consumer law compliance program, publish a corrective notice on its website, notify dealers of the court’s findings, and to pay part of the ACCC’s costs.


Mazda Australia has agreed to pay compensation and to pay an additional $3000 per vehicle.


“Mazda is, and has always been, committed to ensuring the best possible outcomes for its customers, having regard to their rights under the law,” a Mazda Australia spokesperson said.


“We are carefully reviewing the court’s decision with a view to determining our response.”


The ACCC initiated proceedings against Mazda Australia in October 2019. The Federal Court handed down its decision 25 months later finding Mazda Australia had engaged in misleading and deceptive conduct and made false or misleading representations to nine customers about their consumer guarantee rights.


The court dismissed the ACCC’s allegations that Mazda Australia had engaged in unconscionable conduct in its dealings with the consumers.


The ACCC appealed against the Federal Court’s decision to dismiss its allegations that Mazda Australia had engaged in unconscionable conduct on April 14, 2022. The appeal was dismissed 11 months later.


Mazda Australia appealed against the Federal Court’s decision that it had made 49 false or misleading representations to consumers. Mazda Australia’s appeal was dismissed on March 23, 2023.


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.


With ACCC and Nine News.


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