Ford has been hit with a A$10m penalty in connection with dual clutch automatic transmissions fitted to several vehicle models sold in Australia and could still face class-action lawsuits from disgruntled current and former vehicle owners.
The Federal Court ruled Ford Motor Company of Australia engaged in unconscionable conduct in the way it dealt with complaints about PowerShift transmission (PST) cars, and ordered the automaker to pay $10m in penalties.
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The court held Ford's conduct in responding to consumer complaints about Fiesta, Focus and EcoSport vehicles fitted with PST between 1 May 2015 and 29 February 2016 was unconscionable.
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 – 37% of these vehicles had at least one clutch replacement.
"Ford's $10m penalty is one of the largest handed down under the Australian Consumer Law and reflects the seriousness of Ford's conduct. 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," ACCC chairman Rod Sims said.
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.
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By GlobalData"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. 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," Sims said.
"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. Buying a new car is a significant financial commitment and Ford's unconscionable conduct caused considerable distress and frustration to thousands of consumers," Sims said.
In addition to these court orders, the ACCC has accepted a court enforceable undertaking from Ford to establish a programme to review customer requests for refunds or replacement vehicles made between 1 May 2015 and 1 November 2016. At least 2,000 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. 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," Sims added.
GoAutoNews reported class actions by law firms including Bannister Law would continue.
Bannister Law founder and principal Charles Bannister told the auto trade website news Ford had received a fine was "welcome" and could lead to potential refunds for the owners of about 70,000 Ford cars in the class action. Bannister Law is acting for about 4000 clients on the Ford case, Bannister told GoAutoNews' Premium newsletter.
Australia's said about 75,000 Ford vehicles sold in Australia between 2011 and 2016 were fitted with the PowerShift transmission which, just-auto understands, is a product of a Ford-Getrag joint venture.
Most Fiesta and Focus models sold in Australia were built in Thailand. EcoSports came from India. Ford has replaced the twin clutch automatic with a conventional torque converter unit in its latest European Fiesta. Ford plans to reduce the number of redesigned Fiesta and Focus model variants headed for Australia to a few sporty versions which will now be sourced from Germany while its Thai plants concentrate on increased Ranger truck output.
"Accepting the $10m fine is the first action on our commitment to make right," ABC quoted Ford Australia chief executive Graeme Whickman saying.
"We were overwhelmed with the volume of complaints and, while it was not intended, over a 10-month period our processes were inadequate and information provided was either inaccurate or incomplete.
"We let our customers down and for that we are sorry."
