Mazda Australia fined $11.5 million for misleading conduct by Federal Court

Mazda Australia has been ordered to pay $11.5 million for "misleading and deceptive conduct" to nine customers after ignoring or denying requests for replacement vehicles – without an additional payment – or refunds following "recurring and serious faults" with their cars.

The Australian Competition and Consumer Commission (ACCC) initiated proceedings against Mazda back in October 2019, accusing the car company of "unconscionable conduct" and making "false or misleading representations" in its dealings with customers who bought new cars between 2013 and 2017.

While the Federal Court eventually found Mazda had not engaged in "unconscionable conduct" following an appeal, it ruled the company had made 49 false or misleading representations to those nine customers within two years of buying their cars.

The nine customers had requested a refund or replacement vehicle from Mazda after suffering from "recurring and serious faults" with their new cars – which Drive understands included a Mazda 2, Mazda 6, Mazda CX-3, Mazda CX-5, and a Mazda BT-50.

Despite multiple repairs – and one vehicle having three engine replacements – Mazda ignored or rejected their requests, instead offering a partial refund, or a replacement vehicle "only if the consumer made a significant payment," according to the ACCC.

MORE: Federal Court orders Honda to pay $6 million for misleading conduct

While the $11.5 million in penalties will be paid to the Commonwealth of Australia, the Federal Court ordered Mazda to pay a total of $82,291 in compensation to the nine customers affected – with one couple receiving $27,650.

Mazda Australia also voluntarily offered to pay each of the customers an additional $3000.

"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," ACCC Deputy Chair Catriona Lowe said in a written statement.

"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."

The judge also ordered Mazda to implement an Australian Consumer Law compliance program within its business, publish a corrective notice on its website, and notify its dealers of the Federal Court's findings – while also having to pay part of the ACCC's legal costs.

"Mazda has today received the decision of the Federal Court on the penalties to apply following its judgment that Mazda engaged in misleading conduct towards nine consumers in respect of the application of guarantees under the Australian Consumer Law," a spokesperson for Mazda Australia told Drive.

"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," the Mazda spokesperson said.

Under Australian Consumer Law, customers can choose to have a product replaced, repaired, or refunded if there is a "major failure".

A major failure is defined as a product being unsafe, not fit for purpose, or not able to be fixed within a reasonable time.

As Australia's top consumer watchdog, the ACCC has been focusing on the automotive industry in recent years, warning it will target denied warranty claims "indefinitely".