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ACCC to spill more on ‘alarming’ breaches

Scathing: ACCC chairman Rod Sims says his organisation will work with the new-car industry to correct problems raised in its study of industry practices.

Car industry under scrutiny from ACCC over consumer law non-compliance

26 Jul 2017

THE Australian Competition and Consumer Commission (ACCC) has foreshadowed more “alarming” revelations about motor industry practices next month when it plans to publish the results of a study into the new-car retail market.

Fresh from announcing legal action against Ford Motor Company of Australia over what the ACCC alleges is unconscionable and misleading conduct by Ford over its handling of PowerShift transmission problems in 72,000 cars sold in Australia between 2011 and 2016, the federal consumer watchdog says it is alarmed at breaches of consumer law by the new-car industry in Australia.

ACCC chairman Rod Sims said this level of non-compliance had been laid bare by a new car retailing market study due out next month.

“Cars are the second-most expensive purchase most consumers will ever make, and if they fail to meet a consumer guarantee, people are automatically entitled to a remedy,” he said.

“The ACCC urges all vehicle manufacturers to ensure their complaints handling processes provide the remedies that consumers are entitled to get under the Australian consumer law or, like Ford, they will find themselves in court.”

The Ford action results from customer complaints about PowerShift transmissions that shudder or jerk when accelerating, loss of gear selection and sudden loss of power and/or excessive noisiness.

Ford denies the allegations, saying it will challenge them in the Federal Court.

Apart from Ford, the ACCC is also in the process of taking action against Volkswagen AG and its Australian subsidiary, VW Group Australia, over conduct which it says mislead the public over diesel emissions claims under the so-called dieselgate affair.

The ACCC alleges that VW engaged in multiple breaches of the Australian consumer law by concealing software in their vehicles to cheat emissions testing and misleading consumers about the vehicle’s compliance with standards and emission levels during on-road conditions.

Like Ford, VW rejects the allegations.

Audi Australia faces similar ACCC allegations.

Separately, independent car servicing chain Ultra Tune is also facing ACCC action over allegations of breaching consumer law and failing to comply with the franchising code of conduct.

In parallel with the ACCC actions, both Ford and VW are facing class actions from disgruntled owners. The VW action also includes Audi and Skoda owners.

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