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Michael McKenna

THE peak Victorian automotive industry body, the Victorian Automobile Chamber of Commerce (VACC), has reminded dealers and OEMs of their obligations under the Australian Consumer Law (ACL) in the wake of court action taken against Mazda by the Australian Competition and Consumer Commission (ACCC).

At the same time, the VACC, in a bulletin to members, said it was alarmed by the “ongoing menacing tone” of ACCC chairman Rod Sims’ statements with regards to consumers and their treatment by new-car dealers.

The VACC said Mr Sims has stated: “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.”

But the VACC said it has seen many cases where consumers have used the ACL in a “vexatious, misinformed and dishonest manner”.

“The ACCC, state-based offices of fair trading and state-based consumer advocacy groups must make a statement that the ACL is not permitted to be used as a tool to address buyers’ remorse, protection from consumer misuses and abuses or as an opportunity for consumers to profit,” the VACC said.

“Part of ACCC’s original terms of reference is to also promote fair trading and competition for all Australians,” the chamber said.

“Victorian Automobile Dealer Association (VADA) members contributed over $3 billion to the Victorian economy and employ over 14,000 people. Combined with Used Car Trader Division (UCTD) members, they handle almost 500,000 transfers every year.

“This sector is entitled to some form of protection, not constant attacks. And maybe the private-to-private market that makes up 67 per cent of the Victorian transfers should have greater scrutiny.

“Consumers must take responsibility for their actions when purchasing, driving, maintaining and disposing of their vehicle.”

The VACC bulletin was issued to dealers and car-maker representatives in Australia in response to the allegations made against Mazda, and the action and comments attributed to the ACCC.

“It is also worth noting that consumer complaints that have necessitated serious action from Consumer Affairs Victoria totalled .002 per cent of all consumer complaints received,” the chamber said.

VACC policy lead Michael McKenna said the bulletin was “not to single out Mazda or its range of products, but rather to remind all dealers of their obligations and rights under the provisions of the ACL”.

“There have been other ACCC-generated actions against other vehicle manufacturers including Jeep, Hyundai, Volkswagen, Ford and Holden,” he said.

“The bulletin is aimed at ensuring that all Victorian Automobile Dealer Association (VADA ) and VACC Used Car Trader Division members are reminded of their ACL obligations but are also cognisant of the obligations the manufacturer has to the supplier in the event of an ACL remedy.”

Mr McKenna said his office had never been involved with a consumer case regarding the affected Mazda models.

The VACC said that the court action by the ACCC alleges “unconscionable conduct and false or misleading representations by Mazda in its dealings with individual consumers who purchased a Mazda2, Mazda6, Mazda CX-5, Mazda CX-5, Mazda CX-3 and Mazda BT-50 model between 2013 and 2017”.

The ACCC alleges that these consumers began experiencing faults with their vehicles within the first two years of purchase. The vehicles were taken to Mazda dealers for repeated repairs, including multiple engine replacements.

“The ACCC alleges that after repeated attempted repairs, Mazda pressured affected consumers to accept offers that were less than what they were entitled to under the provisions of the ACL,” the VACC said in its bulletin.

“The ACCC alleges that despite the consumers repeatedly asking Mazda for a refund or replacement vehicle, and enduring multiple unsuccessful repair attempts, Mazda told affected consumers that their only available remedy was another repair.”

The ACCC said in a statement that it had repeated its edict that if a vehicle cannot be repaired within a reasonable time or at all, consumers have a right under the ACL to a refund or replacement, and manufacturers cannot refuse these claims.

In similar situations, the VACC said to dealers and OEMs that regardless of what model a consumer is making a claim upon “they should not ever be denied the right to make a claim under the provisions of the ACL”.

“Dealers should always deal promptly with a consumer complaint citing the ACL,” the chamber said.

The VACC said that the two most important maxims in the first instance with an ACL claim from a dealer perspective are to never: a, pressure, demand or request that consumers make a financial contribution to receive the remedies they are entitled to under the ACL; or b, insist or refer a consumer to seek remedy directly from the manufacturer. The supplier dealers have obligations under the ACL for the product they have sold.

“If a dealer does not believe they have an obligation to the consumer under the provisions of the ACL they should ask the consumer to state their complaint in writing,” the VACC said.

“From that point you should determine strategy you will implement. If you can settle the claim, then great. Otherwise, seek your own legal counsel or call VACC consumer adviser or industry policy adviser. Never ever tell consumers they have no rights under the ACL.

“Importantly, all VADA and UCTD members should be aware that as a supplier of a manufacturer product that has developed a defect, you have entitlement under the ACL to relief or reimbursement from the manufacturer for any remedy you have supplied to the consumer. Dealers will find this under s274 of the ACL, Schedule 2 of the Competition and Consumer Act 2010.”

This obligation is listed in ACCC guidance and states: “Some goods may fail to meet one or more of the consumer’s guarantees due to a manufacturing defect or issue that would otherwise be the manufacturer’s fault. The consumer can ask the seller to provide a remedy, and the seller is required by law to oblige.

“In this situation, the manufacturer must reimburse the seller. The reimbursement amount can include any compensation paid to the consumer for reasonably foreseeable consequential losses.

“A supplier has three years to ask the manufacturer for reimbursement, from the earliest of the following dates: the day they fixed any problems with the consumer’s goods; the day the consumer took legal action against the supplier.”

“The VACC advises any VADA or UCTD member that is issued with a Victorian Civil and Administrative Tribunal (VCAT) claim (or similar) where they are defending or repairing a vehicle subjected to an ACL claim that they must, in all instances, join the vehicle manufacturer in the action as a co-respondent,” the VACC stated.

“It’s not a case of the manufacturer not being willing to be co-joined. It’s not their call.

“They can jump up and down as much as they want but they have responsibilities to the product, the supplier and the consumer.

“This is regardless of the vehicle’s age or whether sold as new or used vehicle.”

Mr McKenna said that the new-car retail industry, more so than any other industry, is cognisant and suffers at the hands of the ACL.

“Combined with a plethora of other regulations, it is increasingly difficult for retail industry to sell anything. This impacts the day-to-day running and profitability of dealerships,” he said.

“The VACC will be writing to ACCC to express our disappointment at the comments (regarding dealers) and that any future utterances regarding ACL issues such as the most current Mazda issue be directed and attributed solely at the manufacturer.”

By Neil Dowling

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