The ACCC has accepted a court enforceable undertaking from GM Holden Ltd (Holden), which commits Holden to comply with its consumer guarantee obligations under the Australian Consumer Law (ACL) and adopt recommendations from the recent ACL review.
The ACCC investigated Holden following consumer complaints about its response to a manufacturing fault.
“Holden acknowledged that it misrepresented to some consumers that it had discretion to decide whether the vehicle owner would be offered a refund, repair or replacement for a car with a manufacturing fault, and that any remedy was a goodwill gesture,” ACCC Chairman Rod Sims said.
“Holden also accepted that some consumers were told that a remedy would not be provided because the vehicle had not been serviced by a Holden dealer or with sufficient regularity, or as the vehicle was purchased second hand.”
“The Australian Consumer Law includes consumer guarantees that provide remedies for major and minor faults in motor vehicles. The consumer guarantees operate separately to the manufacturer’s warranty, and cannot be modified to require consumers to have their vehicles serviced by authorised dealers in order to obtain a remedy,” Mr Sims said.
Holden accepted that its conduct is likely to have contravened the consumer law.
“Holden has offered an undertaking that goes beyond ensuring compliance with the current consumer guarantee obligations and commits to measures in line with recommended changes to the law. These are great commitments that will have a significant and positive impact for consumers,” Mr Sims said.
Holden has committed to, among other things:
- Clarify its internal compliance training program so that multiple minor failures of a vehicle may constitute a major failure
- For new vehicles, Holden has also committed to offering consumers a refund or replacement without the need for them to demonstrate a major failure, if a defect prevents a vehicle from being driveable within 60 days of the date of purchase
- Engage an external reviewer to consider complaints since 1 January 2016, and provide a remedy to consumers where appropriate
- Amend its dealer policies and procedures to ensure they comply with the ACL in relation to consumer guarantees, and
- Provide consumers with the ability to obtain information about any issues with their vehicle by contacting Holden and giving their vehicle identification number.
The ACCC’s new car retailing study draft report will be released shortly and will elaborate on the widespread compliance issues we have encountered across this industry.
“As shown over the past week, the ACCC has a range of enforcement tools available to address unlawful conduct and we take a proportional response in addressing non-compliance. I urge all companies selling cars in Australia to get their consumer law compliance programs in order.”
The undertaking is available at public registers.
Background
The recent Australian Consumer Law Review recommended that if goods fail to meet the consumer guarantees within a short specified period of time, a consumer is entitled to the remedies of a refund or replacement without needing to prove a ‘major failure’. The review also proposed to clarify that multiple non-major failures can amount to a major failure. The ACCC supports both of these recommendations, and the Holden undertaking picks up both of these points.