Mazda Australia has been ordered to pay $11.5 million in penalties after it was found to have engaged in misleading and deceptive conduct several years ago.
Between 2013 and 2017, Mazda refused requests from nine separate customers who had asked for a full refund or a replacement vehicle after experiencing major faults across seven models.
The owners were either told the only remedy for the faults was for their vehicles to be repaired, or that they could receive a partial refund or a replacement vehicle – provided they made “a significant payment”.
All of these “solutions” put forth by Mazda Australia contravene Australian Consumer Law, which led the Australian Competition and Consumer Commission (ACCC) to instigate legal action against Mazda Australia in October 2019.
The Federal Court found in favour of the consumer watchdog in November 2021, however Mazda and the ACCC soon appealed the decision on different grounds. This appeal was later dismissed by the Federal Court in March 2023.
Today, it was announced Mazda has been ordered to pay $11.5 million in penalties, following reports of 49 false or misleading representations from the nine customers affected.
The penalties include payments of up to $85,000 in compensation to some affected owners, $3000 of which the brand offered to make voluntarily.
In a media statement, ACCC deputy chair Catriona Lowe said Mazda’s failings will serve as a lesson to the car industry.
“All of the consumers were given the ‘run-around’ by Mazda while it engaged in evasions and subterfuges, provided appalling customer service and failed to make any genuine attempt to consider and apply the consumer guarantee provisions of the Australian Consumer Law,” Ms Lowe said.
“The message to the new car industry is clear, substantial penalties can be imposed on businesses which misrepresent consumer guarantee rights.
“If a vehicle cannot be repaired within a reasonable time, or at all, consumers have a right under the Australian Consumer Law to a refund or replacement, and we expect car manufacturers to honour those rights promptly and without misleading consumers.”
“Mazda has today received the decision of the Federal Court on the penalties to apply following its judgement that Mazda engaged in misleading conduct towards nine consumers in respect of the application of guarantees under the Australian Consumer Law,” a Mazda Australia spokesperson told CarExpert.
“The penalty applies only in respect of that conduct, Mazda having been found in the proceedings not to have engaged in any unconscionable conduct towards the nine consumers.
“Mazda is, and has always been committed to ensuring the best possible outcomes for its customers, having regard to their rights under the law.
“We are carefully reviewing the Court’s decision with a view to determining our response.”
In addition to the financial penalties, Mazda has been ordered to implement an Australian Consumer Law compliance program, publish a corrective notice on its website, notify dealers of the Federal Court’s findings and pay a contribution to the ACCC’s legal costs.
Mazda is the latest carmaker in the ACCC’s firing line, with the consumer watchdog most recently attacking Jeep for its dealers hesitating to uphold the Australian Consumer Law.
Since 2020, Honda, Ford, Toyota, Tesla and Mercedes-Benz have also drawn the ire of the ACCC for various failures.
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