Zooming into Misleading and Deceptive Conduct

In 2019‭, ‬the Australian Competition and Consumer Commission‭ (‬ACCC‭) ‬commenced proceedings against Mazda‭, ‬alleging that Mazda had‭ ‬engaged in misleading and deceptive conduct in the course of their business in relation to nine of their consumers‭.‬

ACCC Declarations

The ACCC sought declarations that, between 2015 and 2019, Mazda:

Engaged in conduct which was misleading or deceptive, or likely to mislead or deceive;

Made false or misleading representations with respect to consumer guarantees; and

Engaged in unconscionable conduct, in contravention of the provisions of the Australian Consumer Law (ACL).

Mazda Representations

In particular, the ACCC alleged that Mazda made the following representations:

That certain faults with Mazda’s vehicles were not considered “major failures” under the ACL.

That the consumers were not entitled to a refund or replacement vehicle at no cost to them under the ACL.

That the consumers could not seek a refund or replacement under the ACL as Mazda was entitled to repair those vehicles.

Mazda was not required to provide a refund or replacement due to the age or mileage of the vehicles.

That a “major failure” within the meaning of the consumer guarantee provisions of the ACL is limited to a failure of a major component of the vehicle.

The ACCC asserted that the above representations were false or misleading as they misrepresented the provisions and application of the ACL and were made in circumstances where Maza had no reasonable grounds for those representations.

Court Decision

While the Court did not agree that Mazda had engaged in unconscionable conduct when dealing with its customers, the Court did find that Mazda contravened ss 18(1) and 29(1)(m) of the ACL by:

Making false representations concerning the existence or effect of consumer guarantees (and the rights or remedies available to the consumers); and

Making false representations concerning whether Mazda had reasonable grounds for forming an opinion that the consumer was not entitled to a refund or replacement vehicle under the ACL.

In February 2024, The Court ordered Mazda to pay $11.5 million in penalties for engaging in misleading and deceptive conduct and making false or misleading representations to the nine consumers.

If you would like advice or assistance in relation to your rights and obligations under the Australian Consumer Law, please contact our accredited business law specialists and Partners Justin Thornton on jthornton@marsdens.net.au and Rahul Lachman on rlachman@marsdens.net.au or otherwise by calling them on (02) 4626 5077.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.