Ford given $10m ticket for fobbing off gear box gripes as court backs ACCC call

A court has backed ACCC writing Ford Australia a $10m ticket over the mishandling of complaints about faulty gear boxes.

Visitors and journalists crowd near a Ford Focus on display at the Ford exhibit during the media day for the China Auto Show in Beijing. (AP Photo/Andy Wong)

Ford has been slapped with the equal largest penalty for breaching consumer law in Australian history, with the car maker fined $10 million for ‘unconscionable conduct’ related to faulty gear boxes.

The federal court on Thursday agreed with the consumer watchdog ACCC, which argued Ford mishandled customer complaints over cars that shuddered, jerked or lost power because of faulty transmissions.

The fine is the highest doled out to a car company in Australia and equals a 2014 action against Coles for misconduct towards suppliers.

Some customers were told it was their driving style causing the clutch problems, despite Ford knowing the gear box was at fault, the ACCC said.

The Federal Court on Thursday confirmed the $10m penalty for engaging in unconscionable conduct relating to about 10,500 customer complaints between May 2015 and February 2016, bringing an end a court process that had dragged on for almost a year.

The focus of the complaints were Ford’s Focus, Fiesta and EcoSport models sold between 2011 and 2016, which were fitted with a PowerShift transmission. The gear boxes in many cases failed repeatedly and customers were made to fork out cash for replacement vehicles.

“In most cases, Ford refused to provide a refund or no-cost replacement vehicle to consumers, even after vehicles had undergone multiple repairs,” ACCC chairman Rod Sims said.

Ford has promised to establish a redress scheme and “make it right” with the customers who were mistreated.

“We took too long to identify the issues and we acknowledge that PowerShift customers did not have complaints handled appropriately between May 2015 and February 2016,” Ford president and CEO Graeme Whickman said in a statement.

“We were overwhelmed with the volume of complaints and, while it was not intended, over a ten-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.

“This process has identified the challenges our customers faced and the lack of

appropriate processes to effectively handle these.

“We are committed to making right with these customers ... Accepting the $10m fine is the first action on our commitment to make right.”

As The Australian reported in 2017

some customers took their cars in for repairs up to seven times, with Ford allegedly often charging owners about $7000 for a replacement vehicle.

Some customers were asked to demonstrate the gear box problems on demand to dealers, even though Ford knew the problems were intermittent.

“(Ford) required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken,” Mr Sims said.

The car maker also failed to tell many customers of their legal entitlements to remedies available under the consumer guarantees, the court found. The ACCC said the $10m fine reflects the seriousness of Ford’s misconduct.

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

Mr Sims said.

Justice John Middleton said a large penalty was required to deter Ford and other car makers from mistreating customers in the future.

“Because so many customers deal with the car industry, it is imperative that those operating in it comply with the Australian Consumer Law,” he told the court.

Ford will pay $500,000 towards the ACCC’s legal costs.

It added that owners of Ford Focus, Fiesta or EcoSport vehicles with a PowerShift transmission who requested, but did not receive a refund or no cost replacement vehicle between 1 May 2015 and 1 November 2016, can have their case independently reviewed.

Ford said it would provide compensation to affected customers in line with the decision.

Additional reporting: AAP