Australian Consumer Agency Comes Down on Automakers

Citing more than 10,000 complaints in the past two years, the Australian government watchdog says it’s on the prowl for new-car manufacturers that mislead consumers into using dealers over independent retailers for repairs.

The Australian Competition and Consumer Commission draft report of an almost 12-month study of the new-car-retailing industry comes weeks after it accused Ford Australia in Federal Court of misleading customers and accepted enforceable assurances from GM Holden it will comply with consumer laws.

“Our draft report highlights the urgent need to address widespread issues in the industry,” ACCC Chairman Rod Sims says in a statement.

The report highlights three key complaints:

The Federal Chamber of Automotive Industries released a neutral comment on the report.

“The industry strives to deliver the best outcomes for its customers through offering world-class technology, safety, value and service to Australian consumers; a commitment which is underpinned by both consumer law and the manufacturers’ warranty and support mechanisms,” the statement says.

“The industry looks forward to working closely with the ACCC to provide more information about the complex matters raised in the draft report.”

Sims was not so restrained, saying the ACCC is deeply concerned about the level of non-compliance with the consumer law in the new-car industry.

“We will continue to take action to address failures by car manufacturers and retailers to provide the remedies to which consumers are entitled,” he says.

The ACCC found many automakers have not factored consumer-guarantee rights into their complaint-handling systems and new-car buyers are losing out as a result. These rights provide remedies for consumers if their new car experiences a failure, including a right to a repair without charge for a minor failure, or a replacement of the car or a full refund for a major failure.

The Australian Automobile Association says the report shines a light on the challenges facing consumers in buying and running a new car.

AAA CEO Michael Bradley says the consumer watchdog has confirmed the issues it has raised are real.

“The AAA renews its call on the Australian government to introduce a real-driving emissions-testing program, conducted in Australia, using Australian fuels, to provide consumers accurate information,” he says in a statement.

The AAA has also campaigned for greater competition in the repair market, both by requiring brands to share all appropriate information with independent repairers, and by allowing consumers to decide who has access to their vehicle data.

“If that information is not provided to independent repairers, this may stifle competition and lead to consumers needlessly paying more for servicing,” Bradley says.