Ford receives massive slap on the wrist

Riley Riley

With the smell of “dieselgate” still lingering in the air, the car industry has been dealt another major blow with Ford in Australia receiving a staggering $10 miilion slap on the wrist for the way it dealt with complaints over faulty Powershift transmissions.

The Australian Competition & Consumer Commission (ACCC) has described Ford’s conduct as “unconscionable” in the way it dealt with consumer complaints about Fiesta, Focus and EcoSport vehicles fitted with Power Shift Transmissions (PST) between May 1, 2015 and February 29, 2016.

From 2011 to 2016, Ford supplied over 70,000 Fiesta, Focus and EcoSport vehicles fitted with a 6-speed, dry dual-clutch transmission system known as the PowerShift Transmission.

Consumers who purchased Ford vehicles with PST made complaints to Ford and its dealers about their car’s excessive clutch shudder, excessive noisiness from the transmission, delayed acceleration and excessive shuddering and jerking when accelerating.

Of these, 37 per cent had at least one clutch replacement.

“Ford’s $10 million penalty is one of the largest handed down under the Australian Consumer Law and reflects the seriousness of Ford’s conduct,” ACCC Chairman Rod Sims said.

“Ford knew that its vehicles had three separate quality issues, but dealt with affected customers in a way which the Court has declared to be unconscionable.”

Ford communicated with its dealers about the quality issues on multiple occasions, but did not provide adequate information about the quality issues to the customers who complained to Ford about their vehicles.

“Despite knowing that shuddering was a symptom of the quality issues with the vehicles, Ford frequently told customers that shuddering was the result of the customer’s driving style,” Mr Sims said.

“Ford knew that the symptoms of the quality issues with the vehicles were experienced intermittently, but required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken.

“In most cases, Ford refused to provide a refund or no-cost replacement vehicle to consumers, even after vehicles had undergone multiple repairs that had not resolved consumers’ complaints.“

Ford mostly provided replacement vehicles in accordance with its “Ownership Loyalty Program”, which required consumers to make a significant payment towards a replacement vehicle.

“Ford told consumers that refunds and replacement vehicles were not an option, when they may have been legally entitled to these remedies under the consumer guarantees,” Mr Sims said.

“Buying a new car is a significant financial commitment and Ford’s unconscionable conduct caused considerable distress and frustration to thousands of consumers.”

In addition to these Court orders, the ACCC has accepted a court enforceable undertaking from Ford to establish a program to review customer requests for refunds or replacement vehicles made between May 1, 2015 and November 1, 2016.

At least 2000 affected consumers can apply for an independent arbiter to assess their complaints.

Ford has also undertaken to provide customers with access to more information about their cars, including the history of manufacturing defect repairs performed on their vehicles.

“The Court’s decision is a reminder that businesses must have systems in place to properly review consumer claims for refunds or replacements,” Mr Sims said.

“New car retailing is an enforcement and compliance priority for the ACCC, and we will take action against manufacturers that we believe have breached the Australian Consumer Law.”

Consumers will be eligible to participate in Ford’s independent complaints review program if they:

  • owned a Ford vehicle fitted with a six speed dry dual-clutch automatic transmission (PowerShift Transmission) between May 1, 2015 and November 1, 2016
  • made a request for a refund or replacement, between May 1, 2015 and November 1, 2016, to Ford (including to Ford’s Customer Relationship Centre) either directly or with the assistance of a Ford dealer, and
  • did not receive a full refund or a replacement vehicle at no additional cost.

Further information about the program can be obtained from Ford’s website here

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