The Australian Competition and Consumer Commission (ACCC) said it had begun proceedings against Ford Australia alleging that it engaged in unconscionable and misleading or deceptive conduct, and made false or misleading representations in its response to customer complaints about a dry dual clutch automatic transmission sold Down Under for about five years.

The customer complaints were about Focus, Fiesta and EcoSport vehicles supplied in Australia between 2011 and 2016, which featured the PowerShift transmission (PST), the ACCC said in a statement.

The ACCC alleges that about half of the 70,000 vehicles sold had at least one repair relating to the PST. Customers complained to Ford and its dealers about their cars’ excessive shuddering and jerking when accelerating, loss of gear selection and sudden loss of power and/or excessive noisiness from the PST.

From 2011 to May 2015, Ford allegedly refused to provide a refund or replacement vehicle to consumers, even after vehicles had undergone multiple repairs that had not fixed the issue. In most cases, Ford only provided replacement vehicles in accordance with its PowerShift Ownership Loyalty Program which required consumers to make a significant payment towards a replacement vehicle. 

“The ACCC alleges that Ford misrepresented to customers who made complaints that the issues with their vehicles were caused by the way the driver handled the vehicle, even though Ford was aware of systemic issues with the vehicles from at least 2013,” ACCC chairman Rod Sims said.

It is also alleged that in most cases Ford refused to provide a refund or a replacement vehicle unless customers participated in the Powershift Ownership Loyalty Program by making a substantial payment for a replacement vehicle, which was on average A$7,000. As a result, customers who could not afford to make these payments felt that they had no option but to continue to use their vehicles.

“The ACCC alleges that Ford’s conduct towards customers who had complained of issues with their vehicles was unconscionable. It is also alleged that Ford then on-sold vehicles surrendered as part of the Powershift Ownership Loyalty Program to wholesalers and customers without disclosing the systemic or specific issues experienced with those vehicles,” Sims added. 

“The ACCC is alarmed about the level of non-compliance with the Australian Consumer Law in the new car industry, which has been laid bare in our new car retailing market study due out next month. Cars are the second-most expensive purchase most consumers will ever make and if they fail to meet a consumer guarantee, people are automatically entitled to a remedy.”

“The ACCC urges all vehicle manufacturers to ensure their complaints handling processes provide the remedies that consumers are entitled to get under the Australian Consumer Law or, like Ford, they will find themselves in court,” Sims said.

The ACCC is seeking declarations, injunctions, pecuniary penalties, consumer redress orders, corrective advertising, and compliance programme obligations.

Ford reportedly has vehemently denied the allegations.

Local president and CEO Graeme Whickman told local trade publication GoAutoNews that while Ford strongly refuted the allegations, the company would work with the ACCC “wherever needed to help provide certainty about the application of Australian consumer law for our industry”.

“Our focus right now is on continuing to get the latest-specification clutch to our customers so they can enjoy their vehicles as intended,” he said.

“We acknowledge that some customers had a poor experience when the clutch shudder issues on the PowerShift transmission first came to light and we are sorry for this,” Whickman said in a statement cited by GoAutoNews.

“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.

“Repairs are available for all PowerShift transmission issues and all new vehicles on sale today are built with the latest updates.”

Ford Europe recently dropped the twin clutch unit for its redesigned Fiesta, replacing it with a conventional six-speed torque converter automatic.