ACCC Moves Forward With Legal Action Against Ford

Table of Contents

Share at:

On Wednesday 26th July, ACCC took legal action against Ford for misleading customers into buying cars with faulty transmission boxes and for on-selling surrendered cars without disclosing the internal issues.

Background

Ford has allegedly been selling the 2011-2016 Fiesta, EcoSports, and Focus models that had transmission box issues. Whilst the gearbox used, the PowerShift Transmission was advertised to be more fuel efficient and smoother in terms of gear transition, many customers who bought these models experienced major problems with the car, including sudden jerks during acceleration, sudden loss of power and excessive noise. Of the 70,000 cars that were sold, at least 50% needed at least 1 significant repair and some cars had as many as 7.

Criticisms

Rod Sims, the chairman of the ACCC claims that Ford knew about the systemic issue in their cars since 2013, yet they continued to mislead existing customers. Ford allegedly told customers that their cars had ‘no problem’ and that the issues arose from their ‘poor handling’ of the car. Thus, deserving requests for repairs, replacements and refunds were refused and the only customers who did get replacements were those who made an upfront payment of $7,000 to the PowerShift Loyalty Program. By the end of July 2016, 800 replacements were transacted, totalling to approximately $5.6 million.

Under Australian Consumer Law, the purchase of a product would automatically give way to a customer guarantee, which entitles customers to a repair, refund or replacement should the product be faulty. Therefore, should these claim be true, Ford’s non-compliance would receive heavy legal scrutiny.

On the other end, the CEO of Ford Motors Company Australia, Graeme Whickman, denies these claims, adamantly insisting that the company on the contrary has been executing repairs, replacements and refunds as necessary and reaching out to affected customers.

“We’ve continued to improve our response times to customers and have been repairing vehicles, compensating customers, and depending on the circumstances, providing full refunds and providing replacement vehicles,” Mr Whickman said.

The ACCC has made further allegations of unconscionable conduct regarding Ford’s on-sale of surrendered cars, without fault disclosure, but Mr Whickman all the same has denied these claims.

To learn more about what is unconscionable conduct, check out our previous guide.

Final Thoughts

This incident highlights the importance of not only abstaining from any forms of misleading and deceptive conduct but also understanding the laws behind it to prevent it from happening inadvertently. Any exchange of goods and services are done so under a customer guarantee, which means that should the product be faulty or be different to how it was advertised, the customer is entitled to a refund, replacement or repair.

What are your thoughts on the Ford incident? Let us know your thoughts by tagging us at #lawpath or @lawpath.

Share at:

Simplify creating legal documents today

Browse through Lawpath's AI tools which can be used to draft, review and refine legal documents today!

Related Articles

Top 10 Documents Used in the Hospitality Industry

The hospitality industry is comprised of many different parts - find out the top 10 most used legal documents in the hospitality industry.

Memorandum and Articles of Association: an Explainer

Find out everything you need to know about memorandum and articles of association and whether or not your business needs it.

4 Simple Steps to Reactivate Your ABN (2026 Update)

Whether you've cancelled your ABN for a short time or for years, here's everything you need to know about reactivating your cancelled ABN.

How to Get a Reptile Licence

Thinking about keeping a reptile as a pet? Find out which types of reptiles you can keep and how to go about obtaining the right licence.

How to Find Your Tax File Number (TFN)?

Misplaced or forgotten your Tax File Number (TFN)? Read this article to learn ways you can find out your tax file number.

How Do I Add A Partner To My Business?

So you've started your business and everything is running smoothly. So smoothly, in fact, you need a trusted partner to help you manage things from the top. How do you do it?