ACCC targets Mazda

Mazda Australia is facing Australian Competition and Consumer Commission (ACCC) court action over allegations it denied customers with serious vehicle issues their legal rights under Australian Consumer Law (ACL).

Mazda has promised the proceedings will be “vigorously defended”.

The ACCC is taking Australia’s number two selling brand to the Federal Court, accusing it of unconscionable conduct and making false or misleading representation in its dealings with 10 buyers of seven new vehicles between 2013 and 2017.

If found guilty, Mazda potentially faces up to millions of dollars in fines under ACL.

The ACCC has alleged the 10 consumers – represented in the court documents as both individuals and couples -- began experiencing faults with their vehicles within two years of purchase between 2013 and 2017.

These faults allegedly included unexpected power loss and deceleration while being driven and resulted in repeated visits to Mazda dealers for repairs including multiple engine replacements. One vehicle was off the road for four months within a six-month period, the ACCC claims.

Vehicles affected include the Mazda2, Mazda6, Mazda CX-5 and CX-5B, Mazda CX-3 and Mazda BT-50.

“We allege that Mazda repeatedly refused to provide a refund or a replacement at no cost to the consumers and pressured them to accept lesser offers which were made by Mazda only after multiple failures of the vehicles and repeated attempted repairs,” ACCC Chair Rod Sims said.

“In short, our case is that Mazda gave these consumers the ‘run around’ while denying their consumer guarantee rights.”

Mazda’s response is to point to its record of customer service, which includes sitting atop the respect JD Power Australia Customer Service Index (CSI) Study for the last four years.

“Mazda Australia recognises that the purchase and ownership of a new car is a major investment for Australian consumers,” the company said in a statement.

“As such, Mazda Australia’s objective is to always to provide the ultimate customer experience; an experience that has been consistently confirmed as the highest by industry and independent surveys at purchase and service milestones.

“In doing so, it consistently exceeds its legal obligations. It is, therefore, disappointed that the ACCC has chosen to commence legal proceedings against it for alleged breaches of the Australian Consumer Law. Those proceedings will be vigorously defended.”

The ACCC alleged that after repeated attempted repairs, Mazda and its dealers pressured the consumers to accept offers that were less than what they were entitled to.

Mazda offered to refund only a portion of the car’s purchase price, or offered to provide a replacement car if the consumer made a significant payment. In one case, Mazda’s offer was limited to an extended warranty and free service of the vehicle.

“Consumers do not have to make any financial contribution to receive the remedies they are entitled to under the Australian Consumer Law,” Sims said.

“The ACCC remains alarmed about the barrage of issues consumers face when they attempt to exercise their consumer rights because there is a problem with a new vehicle they have purchased.”

"The new car industry is squarely on notice of our concerns. We will continue to take action against vehicle manufacturers and suppliers that fail to provide remedies to consumers who are entitled to them especially those who have bought vehicles with major failures.”

The ACCC is seeking penalties, declarations, injunctions, consumer redress, a publication order, an order requiring the implementation of a compliance program and costs.

Six of the seven cases are being judged under old Australian Consumer Law penalties structure, which allows a fine of up to $1.1 million per breach. Since 2018 the ACL allows a maximum fine of $10 million or 10 per cent of company turn-over.

This is the latest in a series of ACCC actions in and out of court against car companies including Ford, Hyundai and Holden.