Statutory Consumer Guarantees for new motor vehicles

By Margaret Miller • In Consumer Law, LawComments Off on Statutory Consumer Guarantees for new motor vehicles

The ACCC has accepted a court enforceable undertaking offered by Holden to address the ACCC’s concerns about Holden’s compliance with the Australian Consumer Law (ACL) and the ACL’s consumer guarantees.

By its undertaking, Holden has committed not only to comply with the ACL as it stands, but also to take measures consistent with proposed changes to the ACL not yet adopted or legislated by the Government. These measures include:

(a) offering consumers a choice of refund, replacement or repair of a vehicle where a defect prevents a vehicle from being driveable within 60 days of purchase, whether or not the defect results in a ‘major failure’ within the meaning of the ACL; and

(b) clarifying through compliance training for both employees and dealers that “multiple minor failures of a vehicle may constitute a major failure entitling the customer to a refund or replacement rather than a vehicle repair”.
Holden in its dealings with consumers, its resolution of consumer complaints, and its dealings with Holden dealers about consumer complaints, focused on Holden’s new car warranty and excluded rights and obligations under the Statutory Consumer Guarantees.

The undertaking requires Holden to:

(a) upgrade its existing Consumer Law Compliance Program and its complaints handling systems to “ensure that a consideration of customers’ rights under and arising from the Statutory Consumer Guarantees is embedded in all relevant systems, procedures and practices with the objective of ensuring that consumers are not denied remedies they are entitled to arising from the Statutory Consumer Guarantees”;

(b) ensure that Holden customers know their rights under the Statutory Consumer Guarantees by publishing a Customer Service Charter on Holden’s website within 120 days of the undertaking and by providing all new customers with a letter from Holden within 30 days of purchase “which advises them of their rights in relation to the Statutory Consumer Guarantees”;

(c) amend the Holden Dealer Agreement to clarify dealers’ obligations under the Statutory Consumer Guarantees, customers’ rights under the Statutory Consumer Guarantees and the dealers’ rights to be indemnified by Holden under the ACL for some dealer liabilities under the Statutory Consumer Guarantees; and

(d) upgrade compliance training for both employees and dealers to set out rights and obligations under the Statutory Consumer Guarantees.

The ACCC regards the Statutory Consumer Guarantees as the minimum standard to protect consumers acquiring goods or services. The Holden undertaking describes the Statutory Consumer Guarantees as providing consumers with “…a basic, guaranteed level of protection for goods and services which they acquire…”

Suppliers’ ignorance of the rights and obligations created by the Statutory Consumer Guarantees is no excuse for non-compliance. Consumers’ awareness of their rights under the Statutory Consumer Guarantees is steadily growing and they are increasingly asserting their rights regarding defective goods and services.

Service staff and call centre staff who deal with consumer complaints need training to ensure that they understand consumers’ rights under the Statutory Consumer Guarantees. Otherwise they may not resolve consumer complaints under the Statutory Consumer Guarantees or may mislead consumers about their rights in contravention of the ACL.

Consumers’ rights under the Statutory Consumer Guarantees are not limited by the terms of any express warranty or guarantee. Consumers may be entitled to remedies under the Statutory Consumer Guarantees after any express guarantee or warranty has expired.

Manufacturers, including importers deemed manufacturers under the ACL, have an obligation under the ACL to indemnify retailers for some of the retailers’ liabilities under the Statutory Consumer Guarantees. A manufacturer cannot tell a retailer not to provide a remedy without the prior approval of the manufacturer.

The ACCC’s new car retailing study identified several significant compliance concerns. The long-established industry practice of selling new cars with a new car warranty appears to cause many of the compliance issues identified by ACCC. Compliance measures must all be reviewed to ensure that rights and obligations under the Statutory Consumer Guarantees are not limited by the terms of new car warranties.

Important:
This article was prepared by Margaret Miller of Bell Legal Group for general information only and it is not legal advice. For legal advice about Australian Consumer Law and how it may affect you or your business contact us on 07 5597 3366 or send an email to mmiller@belllegal.com.au

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