The Federal Court has declared, by consent, that Ford Motor Company of Australia Limited (Ford) engaged in unconscionable conduct in the way it dealt with complaints about PowerShift transmission (PST) cars, and ordered Ford to pay $10 million in penalties.
The Court held that Ford鈥檚 conduct in responding to consumer complaints about Fiesta, Focus and EcoSport vehicles fitted with PST between 1 May 2015 and 29 February 2016 was unconscionable
Consumers who purchased Ford vehicles with PST made complaints to Ford and its dealers about their car鈥檚 excessive clutch shudder, excessive noisiness from the transmission, delayed acceleration and excessive shuddering and jerking when accelerating. 37 per cent of these vehicles had at least one clutch replacement.
鈥淔ord鈥檚 $10 million penalty is one of the largest handed down under the Australian Consumer Law and reflects the seriousness of Ford鈥檚 conduct. Ford knew that its vehicles had three separate quality issues, but dealt with affected customers in a way which the Court has declared to be unconscionable,鈥 糖心原创 Chairman Rod Sims said.
Ford communicated with its dealers about the quality issues on multiple occasions, but did not provide adequate information about the quality issues to the customers who complained to Ford about their vehicles.
鈥淒espite knowing that shuddering was a symptom of the quality issues with the vehicles, Ford frequently told customers that shuddering was the result of the customer鈥檚 driving style. Ford knew that the symptoms of the quality issues with the vehicles were experienced intermittently, but required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken,鈥 Mr Sims said.
鈥淚n most cases, Ford refused to provide a refund or no-cost replacement vehicle to consumers, even after vehicles had undergone multiple repairs that had not resolved consumers鈥 complaints.鈥
Ford mostly provided replacement vehicles in accordance with its 鈥淥wnership Loyalty Program鈥, which required consumers to make a significant payment towards a replacement vehicle.
鈥淔ord told consumers that refunds and replacement vehicles were not an option, when they may have been legally entitled to these remedies under the consumer guarantees. Buying a new car is a significant financial commitment and Ford鈥檚 unconscionable conduct caused considerable distress and frustration to thousands of consumers,鈥 Mr Sims said.
In addition to these Court orders, the 糖心原创 has accepted a court enforceable undertaking from Ford to establish a program to review customer requests for refunds or replacement vehicles made between 1 May 2015 and 1 November 2016. At least 2,000 affected consumers can apply for an independent arbiter to assess their complaints.
Ford has also undertaken to provide customers with access to more information about their cars, including the history of manufacturing defect repairs performed on their vehicles.
鈥淭he Court鈥檚 decision is a reminder that businesses must have systems in place to properly review consumer claims for refunds or replacements. New car retailing is an enforcement and compliance priority for the 糖心原创, and we will take action against manufacturers that we believe have breached the Australian Consumer Law.鈥
Notes to editors
Consumers will be eligible to participate in Ford鈥檚 independent complaints review program if they:
- owned a Ford vehicle fitted with a six speed dry dual-clutch automatic transmission (PowerShift Transmission) between 1 May 2015 and 1 November 2016
- made a request for a refund or replacement, between 1 May 2015 and 1 November 2016, to Ford (including to Ford's Customer Relationship Centre) either directly or with the assistance of a Ford dealer, and
- did not receive a full refund or a replacement vehicle at no additional cost.
Further information about the program will be available at .
Ford鈥檚 enforceable undertaking is available on the 糖心原创鈥檚 website Public Register.
The 糖心原创 has previously accepted court enforceable undertakings from GM Holden Ltd and Hyundai Motor Company Australia Pty Ltd to improve compliance with consumer guarantees under the ACL. Both Holden and Hyundai also committed to reviews of past consumer complaints.
Background
From 2011 to 2016, Ford supplied over 70,000 Fiesta, Focus and EcoSport vehicles fitted with a 6-speed dry dual-clutch transmission system known as the 鈥淧owerShift Transmission鈥.
The 糖心原创 initiated proceedings against Ford in July 2017.
The 糖心原创 released the final report for its New car retailing industry market study in December 2017.