The consumer watchdog has reported a surge in the number of Australians complaining about being fobbed off by businesses that sold them faulty products.

The Australian Competition and Consumer Commission (ACCC) says 29,000 people contacted it in 2017 to complain about issues with consumer guarantees – a 39 per cent jump from 2016.

There was a surge in complaints about car dealerships.
There was a surge in complaints about car dealerships.  Photo: Luis Enrique Ascui

Acting ACCC chairman Michael Schaper said he was concerned by the dramatic rise in complaints, which had been driven by a spike in complaints about automotive dealers. 

Automotive dealers were the biggest single focus of complaints, responsible for a quarter of all issues lodged with the ACCC, followed by electronics and whitegoods, which were responsible for another quarter.

“A new car is a big purchase for people – it’s typically the second biggest for most people after a house,” Dr Schaper said.

The watchdog had identified numerous cases of consumers buying new cars only to find them full of minor faults that resulted in them returning it for repairs multiple times.

“If you put them all together you look at it and go, ‘I probably never would have bought this car if I’d known this was going to happen to me’,” Dr Schaper said.

In August, Holden agreed to undertake a series of court-enforceable measures after admitting it mislead customers who bought faulty vehicles about their rights.

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The auto industy’s reputation was also battered by the faulty Takata airbags installed in millions of Australian cars, with the federal government issuing a proposed compulsory recall notice for all vehicles with the airbags in September.

Under Australian law, consumers automatically have the right to a guarantee regardless of what kind of warranty the retailer or manufacturer offers.

Consumers can choose to have their purchase refunded, replaced or repaired if it has a “major fault” – meaning it has a problem that would have stopped the customer buying it if they were aware of it, is significantly different from a sample or description, or is unsafe. 

A business can choose which option to offer if a product has a “minor” fault.

Dr Schaper said another concerning trend was Australians thinking they had fewer protections when shopping online.

“People still believe that in the online context you have less rights than you do in a bricks and mortar store, and that is simply not the case,” he said.

Even retailers based offshore but marketing and selling to Australians were bound by local consumer laws.

The Federal Court last month upheld a $3 million fine against American video game maker Valve for misleading Australian customers about their guarantee rights.

Mr Schaper said shoppers should remember that under consumer law they could have faulty products fixed, replaced or refunded even after the manufacturer’s warranty expired, and that retailers could not palm customers off to manufacturers. 

“They must provide you with a remedy and cannot direct you to the manufacturer instead,” he said.

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