Ford fined $10m for PowerShift handling

The Federal Court has fined Ford Motor Company of Australia Limited $10m over its handling of complaints relating to cars equipped with its PowerShift dual-clutch automated transmissions.

The fine was imposed following an agreement between Ford and the Australian Competition & Consumer Commission (ACCC). The ACCC brought the case against Ford last year.

The Court held that Ford's conduct in responding to consumer complaints about PowerShift-equipped examples of the Fiesta, Focus and EcoSport between May 1, 2015 and February 29, 2016 was unconscionable.

Major penalty

"Ford's $10 million penalty is one of the largest handed down under the Australian Consumer Law and reflects the seriousness of Ford's conduct," ACCC Chairman Rod Sims said today via a press statement.

ACCC says Ford knew that its vehicles had three separate quality issues, but dealt with affected customers in a way which the Federal Court has declared to be "unconscionable".

"Ford communicated with its dealers about the quality issues on multiple occasions, but did not provide adequate information about the quality issues to the customers who complained to Ford about their vehicles," the ACCC stated.

"Despite knowing that shuddering was a symptom of the quality issues with the vehicles, Ford frequently told customers that shuddering was the result of the customer's driving style. Ford knew that the symptoms of the quality issues with the vehicles were experienced intermittently, but required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken," Sims said.

"In most cases, Ford refused to provide a refund or no-cost replacement vehicle to consumers, even after vehicles had undergone multiple repairs that had not resolved consumers' complaints," the ACCC chief detailed.

Review program rolled out

In addition to the fine, the ACCC has accepted a court-enforceable undertaking from Ford to establish a program to review customer requests for refunds or replacement vehicles made between May 1, 2015 and November 1, 2016.

The ACCC says "at least 2000 affected consumers can apply for an independent arbiter to assess their complaints".

Ford Australia declared the outcome "a joint agreement".

It stated the ruling marked "the conclusion of an investigation into Ford's handling of requests for a refund or no-cost replacement of certain Ford Focus, Fiesta and EcoSport vehicles fitted with DPS6 dry-clutch PowerShift automatic transmissions".

Ford Australia boss Graeme Whickman said the company had taken too long to identify the PowerShift issues and acknowledged that "customers did not have complaints handled appropriately between May 2015 and February 2016".

"We were overwhelmed with the volume of complaints and, while it was not intended, over a 10-month period our processes were inadequate and information provided was either inaccurate or incomplete. We let our customers down and for that we are sorry," Whickman stated.

"Of particular concern was the Owner Loyalty Program, which resulted in customers paying an additional cost to buy new vehicles although they may have been eligible for a refund or no-cost replacement vehicle. We now realise this program was flawed as it didn't ensure an adequate assessment of customers' rights under consumer law."

Ford discontinued the program in November 2016.

The company has also agreed to implement a range of actions as part of the settlement. These include an independent review process, customer service charter, upgrading its complaints handling system and additional dealer and staff training.

Next steps for affected customers

Ford Australia advises the following: "Owners of Ford Focus, Fiesta or EcoSport vehicles with a PowerShift transmission who requested, but did not receive, a refund or no-cost replacement vehicle between May 1, 2015 and November 1, 2016 can have their case independently reviewed. Ford will provide compensation to affected customers in line with the independent reviewer's decision.

"The review process will commence in early July 2018 and run for 12 months. However, customers can now call 13FORD or visit www.ford.com.au/powershift to register their email address to receive updates on the independent review process."