Consumer watchdog renews car industry crackdown amid rising complaints

Australia’s peak consumer watchdog has announced a renewed crackdown on the car industry, citing ongoing widespread neglect of consumer rights by manufacturers and dealers.

The new focus comes despite $135 million in fines and more than a dozen investigations since the automotive sector was put under the spotlight in 2015.

As part of its annual 'Compliance and Enforcement Priorities’ announcement, the Australian Competition and Consumer Commission (ACCC), revealed the car industry is responsible for more consumer complaints nationally than any other – and recommitted to its 2015 goal of combating malpractice in automotive businesses big and small.

“Non-compliance with the consumer guarantee provision [by car manufacturers and dealers] continues to be our most reported issue,” a spokesperson for the ACCC told Drive.

Such infringements include failure to uphold warranty guarantees, false or misleading advertising, unscrupulous sales practices, overcharging for servicing, and anti-competitive behaviour (see the full list of previous ACCC investigations and findings below).

“The ACCC has taken numerous enforcement actions in the motor vehicle sector for false or misleading representations and unconscionable conduct by motor vehicle manufacturers, in relation to concerns about non-compliance with the consumer guarantee provisions," the spokesperson added.

Translated: this means the ACCC continues to identify numerous instances of car dealers and car manufacturers not honouring their warranty obligations under Australian Consumer Law.

Among the millions of dollars in fines were actions by the ACCC against Ford and Mazda, both of whom were taken to task for charging customers for costly mechanical repairs for faults that should have been covered under warranty.

In some instances, car dealers blame car companies for not wanting to honour a warranty claim. Other times, car companies blame for the dealer for not treating the fault as a warranty claim.

In the middle of such disputes are customers without the use of their car – and with massive repair bills.

“Reluctance by motor vehicle dealers to provide remedies to which consumers are entitled is to a large extent influenced by the imbalance in their relationships with manufacturers, and simply insufficient confidence that they will obtain reimbursement from manufacturers,” the ACCC told Drive.

While dealers blame manufacturers for faults or malpractice – and vice versa – industry analysts have noted consumers are being left worse-off under the status-quo, with neither party taking responsibility.

When asked how the ACCC aims to combat ongoing malpractice, a spokesperson said: “[We'll] continue to engage with motor vehicle industries about their compliance and, where necessary, will continue to use the existing law to take action against motor vehicle businesses.

“However, the ACCC also continues to advocate for law reform to improve compliance with both the consumer guarantees and the supplier indemnification obligations.”

The ACCC has previously taken car makers and retailers to court for failure to comply with guarantee provisions or anti-competitive practices, and in 2021 handed down its 10th industry penalty in six years – with fines now totalling more than $135 million.

“We’ve long taken an interest in the motor vehicle industry because, for most people, it’s the second most expensive purchase after their home,” ACCC Chair Rod Sims told Drive last year.

“We’ve been very concerned about consumers getting mislead in many ways during our renewed focus on the automotive sector ... There is a concern that some sections of the motor industry are not giving the proper attention to consumers and to Australian Consumer Law."