AUSTRALIA’S consumer watchdog has its teeth into Mazda and is pursuing the car-maker despite the Full Federal Court this week dismissing an appeal against an earlier judgement.

The Federal Court judgement this week stated that Mazda did not engage in unconscionable conduct in its dealings with nine consumers who reported major failures with their new vehicles, including multiple engine replacements.

The Full Federal Court also dismissed Mazda’s appeal against a Federal Court judgement that Mazda made 49 false representations to consumers about their consumer rights.

The Australian Competition and Consumer Commission (ACCC) said the case centres on Mazda’s dealings with nine consumers who had requested a refund or replacement vehicle from Mazda “after experiencing recurring and serious faults with their new Mazda vehicles within a year or two of purchase. One vehicle had three engine replacements.”

Issues relate to seven vehicles purchased new by private buyers between 2013 and 2017 and which were brought before the federal court by the ACCC in 2019.

Documents show the aggrieved owners had numerous problems with the new cars as early as one year into ownership, including the requirement for engine replacements.

The ACCC alleged that Mazda pressured the consumers after repeated failed repairs to accept offers that were below what they were entitled to.

In its statement, the ACCC said: “For example, Mazda offered to refund only a fraction of the car’s purchase price, or offered a replacement car only at a significant cost to the consumer.”

In its 2019 proceedings, the ACCC alleged that these consumers began experiencing faults with their vehicles within a year or two of purchase.

“The faults affected the ability of the consumers to use their vehicles; and in some cases, included the vehicles unexpectedly losing power and decelerating while they were being driven,” it said.

“The vehicles were taken to Mazda dealers for repeated repairs, including multiple engine replacements. One vehicle was off the road for four months within a six month period.”

ACCC (then) chair Rod Sims said in a statement: “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.”

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

The Full Court this week dismissed the ACCC’s appeal from the trial judge’s finding that Mazda’s dealings with the consumers was not unconscionable.

ACCC Commissioner Liza Carver said that the commission appealed “because we believe that it is not acceptable business practice for businesses to give consumers the ‘run around’ and discourage consumers from pursuing their rights for a refund or replacement vehicle.”

The ACCC said it will now “carefully consider the Full Court’s judgement.”

The case will now be referred back to the trial judge for a hearing at a later date on the penalties and other orders sought by the ACCC in relation to the alleged false representations made by Mazda.

The ACCC instituted proceedings against Mazda in October 2019. The Federal Court handed down its decision on 30 November 2021.

The ACCC filed a Notice of Appeal against the Federal Court’s decision on April 14, 2022.
This case concerns seven vehicles and nine individual consumers. Models include Mazda 2, Mazda 6, Mazda CX-5, Mazda CX-5B, Mazda CX-3 and Mazda BT-50 purchased between 2013 and 2017.

The cases range from a CX-5 having faulty headlights to the replacement or overhaul of diesel engines in a BT-50 and CX-5.

The ACCC said that consumer guarantees under the Australian Consumer Law provide remedies for consumers if their product is not of acceptable quality.

“Consumers can choose to have a product replaced, repaired or refunded if there is a major failure,” it said.

“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, multiple minor failures may together amount to a major failure.”

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

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

By Neil Dowling